MicroStrategy recently made headlines by securing a whopping $1.75 billion for acquiring Bitcoin. The company announced that they would be raising this amount through a private offering of convertible senior notes. This move is part of their strategy to increase their Bitcoin holdings, with a total of $4.6 billion worth of Bitcoin acquired on the same day.
According to the official statement released by MicroStrategy on November 18, the funding raised will be used to purchase more Bitcoin in the future. The private offerings are targeted towards institutional buyers, with the possibility of raising up to $1.75 billion through a convertible senior note due on December 1, 2029.
The notes were sold to U.S. buyers under Rule 144A of the Securities Act, and also made available to certain non-U.S. buyers under Regulation S of the same act. In addition to acquiring more Bitcoin, the funding will also be utilized for general corporate purposes.
One interesting aspect of this offering is that the initial purchasers of the notes will have the option to buy an additional $250 million aggregate principal amount of the notes. MicroStrategy plans to present the notes offering on November 19 through a video webinar.
Another significant development is that MicroStrategy allowed the notes to be converted into their class A common stock, cash, or a combination of both. This is not the first time the company has offered such notes, with the most recent offering taking place on September 20, 2024.
On the same day that the funding was secured, MicroStrategy’s executive chairman, Michael Saylor, revealed that the company had acquired 51,780 Bitcoin, equivalent to $4.6 billion. The average price per Bitcoin stood at $88,627, marking a significant increase in their holdings.
This latest acquisition has effectively doubled their previous Bitcoin purchases, bringing their total investment in Bitcoin to $16.5 billion. MicroStrategy now holds a substantial amount of Bitcoin, with 331,200 Bitcoin in their possession as of November 17. This represents approximately 1.57% of the total Bitcoin supply.
Despite the fluctuations in Bitcoin’s price, MicroStrategy’s average Bitcoin price currently stands at around $49,847, which is 47% lower than Bitcoin’s all-time high of $93,477. However, the company has managed to accumulate an unrealized profit of up to $13 billion.
Since announcing their first Bitcoin acquisition in 2020, MicroStrategy’s shares have seen a remarkable increase of 2,400%, rising from $15 to $384. This strategic move to invest in Bitcoin has proven to be highly profitable for the company, showcasing their belief in the long-term potential of cryptocurrency as a valuable asset.