MicroStrategy, a technology company, is planning to acquire more Bitcoin by raising $500 million through a private stock sale. This move is aimed at increasing the company’s Bitcoin holdings, which currently stand at over 1% of all bitcoins in supply, equaling around 214,400 bitcoins. The company sees Bitcoin as a crucial asset and wants to make it a core component of its treasury reserve.
In a recent press release to inform investors about the stock sale, MicroStrategy stated that the net proceeds from the sale of the notes would be used to acquire additional Bitcoin and for general corporate purposes. The sale will offer investors senior due notes, which are set to mature in 2032 unless MicroStrategy decides to repurchase them for cash or convert them for its Class A common stock earlier. Investors can receive bi-annual interest payments on June 15 and December 15 every year, starting from December 15, 2024.
This sale is targeted at professional investors such as financial institutions and will be conducted under Section 144A of the Securities Act 1993. As a result, the stocks will not be offered to the public and will not be registered under the Securities and Exchange Commission (SEC). Initial investors will also have the option to purchase an additional $75 million worth of aggregate principal amount of the senior due notes within thirteen days of the sale launch. Interested investors will have to wait until the sale goes live to find out the interest rate and initial conversion price.
MicroStrategy expects that the reference price used to calculate the initial conversion price for the notes will be based on the U.S. composite volume weighted average price of MicroStrategy’s Class A common stock from 9:30 AM through 4:00 PM EDT on the pricing date.
Overall, MicroStrategy’s decision to raise $500 million through a private stock sale to acquire more Bitcoin highlights the company’s strong belief in the long-term value and potential of Bitcoin as a store of value. This move also demonstrates MicroStrategy’s commitment to diversifying its treasury reserve and leveraging Bitcoin as a strategic asset for future growth and stability.
