MicroStrategy plans to raise $600 million to increase its holdings of Bitcoin, adding fuel to the cryptocurrency frenzy!
MicroStrategy plans to raise $600 million to increase its Bitcoin holdings by selling convertible senior notes. The company has been purchasing Bitcoin since 2020 as a hedge against inflation and currently holds Bitcoin worth approximately $13 billion. MicroStrategy's co-founder, Michael Saylor, has become a proponent of Bitcoin, and this proposed issuance comes as Bitcoin nears its historical high. The convertible senior notes will be offered to qualified institutional buyers, with initial purchasers having the option to buy an additional $90 million in principal amount of notes within 13 days. MicroStrategy's stock price surged by 24%.
Zhitong App learned that MicroStrategy (MSTR.US), the largest enterprise holder of Bitcoin, has proposed to increase its Bitcoin reserves by selling $600 million in convertible senior notes. Since the company began purchasing Bitcoin as a hedge against inflation in 2020, the value of Bitcoin on this enterprise software manufacturer's balance sheet has increased to around $13 billion.
Michael Saylor, the co-founder of MicroStrategy, has become one of the most prominent advocates for Bitcoin, turning this software manufacturer into a Bitcoin proxy for stock investors.
This proposed issuance comes as Bitcoin approaches its historical high of nearly $69,000 at the end of 2021. As of February 25th, MicroStrategy holds approximately 193,000 Bitcoins.
The recent surge in Bitcoin is driven by the new demand for spot Bitcoin ETFs and the increasing trading volume in the crypto derivatives market. MicroStrategy's significant purchases may further fuel this momentum.
According to MicroStrategy's statement on Monday, these convertible senior notes, due in 2030, will be offered to eligible institutional buyers.
The company stated: "It is expected that the initial purchasers of the notes will be granted an option to purchase up to an additional aggregate principal amount of $90 million of notes within 13 days from the date of the initial issuance of the notes (including the issuance date)."
MicroStrategy's stock price surged by 24% on Monday to $1334. So far this year, the stock has more than doubled, outperforming Bitcoin's approximately 60% increase during the same period.