- MicroStrategy buys 12,000 bitcoins, boosting its total holdings to 205,000, valued at over $15B.
- Following the Bitcoin purchase, MicroStrategy stock surged 68% since March 6.
- The firm announced plans for a $500M offering of convertible notes to fund more Bitcoin buys.
MicroStrategy Incorporated has significantly expanded its Bitcoin portfolio by acquiring an additional 12,000 Bitcoins. The purchase, valued at around $822 million, was financed through the use of convertible notes along with surplus cash.
This purchase has significantly increased the business’s holdings of Bitcoin to 205,000, now worth more than $15 billion in equity. This jump in price coincides with the rise of Bitcoin, which established a new record high on Wednesday, with the price exceeding the $73,000 mark.
In response to this news, MicroStrategy, known for its software development but popular as a major Bitcoin investor, witnessed a notable uptick in its stock value. The company’s shares saw an 11% climb on Wednesday, contributing to a week filled with gains: 7.4% on Tuesday, 4.1% on Monday, and 9.7% on Friday.
Since March 6, following the announcement of a debt offering, MicroStrategy’s stock has surged by 68%, and it has remarkably grown by 180% this year, following a 346% increase in 2023. Besides, MicroStrategy announced its intention to issue $500 million in convertible senior notes due in 2031. This offering is targeted at qualified institutional buyers under Rule 144A of the Securities Act of 1933.
The offering also includes a provision for the initial purchasers to optionally acquire an extra $75 million in notes within 13 days from the issuance. These notes, due to mature on March 15, 2031, are classified as unsecured, senior obligations of MicroStrategy, with interest payments due every six months.
The use of the note’s sales proceeds has been pegged to further Bitcoin acquisitions and company operations. MicroStrategy indicated that the notes could be turned into cash, shares of MicroStrategy’s class A common stock, or a combination of both at its discretion. The conditions for conversion are based on certain events and periods until September 15, 2030, with an open conversion possibility until the second trading day prior to the maturity date.
Based on the reports, the sale of these notes, along with the class A common stock shares potentially issuable upon conversion, will not be registered under the Securities Act or any state securities laws. This approach aims at a private offering specifically designed to circumvent registration requirements.
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