MicroStrategy has concluded a new convertible note offering worth $800 million. Funds from the offering were utilized to purchase an additional 12,000 BTC to add to its treasury reserve.
The announcement of MicroStrategy’s intention to issue a fresh series of convertible notes coincided with Bitcoin’s ascent to a record high on March 6. On March 8, the organization successfully concluded the private offering, selling a total principal amount of $800 million.
Michael Saylor, chairman and founder of MicroStrategy, confirmed on the social media platform X that acquiring an additional 12,000 Bitcoin at an average price of $68,477 per BTC using the net proceeds from the note offering and surplus cash was possible.
MicroStrategy held approximately 193,000 BTC at an average price of $31,544 before its most recent Bitcoin acquisition. This represented a $12.9 billion balance and a return of 112% since the firm began acquiring BTC. Saylor has verified that MicroStrategy has acquired 205,000 BTC at an average price of $33,706 per coin for $6.91 billion.
The most recent note offering from MicroStrategy bears an annual interest rate of 0.625 percent and becomes due semi-annually in September and March, beginning in September 2024. The notes are convertible in exchange for cash, MicroStrategy shares, or a combination.
According to the principal amount of $1,000 in notes, the initial conversion rate is equivalent to 0.6677 MicroStrategy’s class A common stock shares. According to the corporation, this corresponds to an approximate initial conversion price per share of $1,497.68.
“This represents a premium of approximately 42.5% over the last reported sale price of $1,051.01 per share of MicroStrategy’s class A common stock on the Nasdaq Global Select Market on March 5, 2024.”
In August 2020, MicroStrategy caused a stir by allocating a substantial proportion of its capital directly into Bitcoin holdings. Saylor led the initiative, which commenced with an initial investment of 21,454 BTC for $250 million.
Saylor stated at the time that the investment was motivated by the organization’s conviction that Bitcoin “possesses greater potential for long-term appreciation than cash and is a reliable store of value and an attractive investment asset.”
Saylor maintained at the time that Bitcoin constituted a more advantageous investment than fiat currency and that the organization’s primary holding in its treasury reserve strategy was Bitcoin. By early January 2024, the organization had already witnessed a more than $1 billion growth in its Bitcoin holdings.
