MicroStrategy (MSTR) has concluded a $3B offering of 0% convertible senior notes due in December 2029. The company intends to allocate the proceeds to buy more Bitcoin.
MicroStrategy (MSTR) has successfully concluded a $3 billion offering of 0% convertible senior notes due in December 2029. The company intends to allocate a portion or the entirety of the proceeds to the acquisition of additional Bitcoin.
Microstrategy to purchase additional BTC as MSTR crash 25%
MicroStrategy intends to raise $42 billion over the next three years by purchasing additional Bitcoin. This strategy includes a $3 billion offering of 0% convertible senior notes.
According to data from Google Finance, the business intelligence firm announced the completion on November 21, as its shares retraced over 25%.
The convertible senior notes are priced at a 55% premium and have an implied strike price of approximately $672. This price is a predetermined level at which an option holder can purchase or sell MicroStrategy’s class A common stock.
The senior convertible note with a 0% interest rate will not give bondholders regular interest. If these convertibles are not converted before maturity, they will mature at face value despite being sold at a discount.
In the sense that holders have priority in the event of bankruptcy or liquidation, they are also “senior” to common stock.
If MicroStrategy were to allocate the entire $3 billion to Bitcoin, it could acquire approximately 30,600 Bitcoins.
The $3 billion offering is a follow-up to MicroStrategy’s November 18 announcement to raise $1.75 billion at 0% interest. This amount was subsequently increased to $2.6 billion on November 20.
The offerings are a component of MicroStrategy’s ambitious plans to raise $42 billion over the next three years to accumulate more Bitcoin under its “21/21” strategy, which consists of $21 billion in equity and $21 billion in fixed-income securities.
The most Bitcoin of any public company, MicroStrategy currently possesses 331,200 Bitcoin valued at over $32.7 billion, according to Saylor Tracker.
On November 21, the closing bell rang, and MicroStrategy (MSTR) shares plummeted by more than 25% from their peak of $536.7 to $397.28.
Citron Research disclosed that it had hedged a short position on MSTR, which indicated that MSTR shares have become “overheated” and that their volume has “completely detached from BTC fundamentals.” This led to the decline.
MSTR continues to be one of the most successful stocks in the US markets in 2024, with a 480% year-to-date increase.
On November 20, it was the second most traded stock in the United States due to the increased weight of the bull case and the risks associated with Bitcoin exposure through MSTR.
On November 21, the “Bitcoin Industrial Complex,” which comprises US spot Bitcoin exchange-traded funds and Bitcoin-related securities such as MSTR and Coinbase (COIN), contributed a record-setting $70 billion trading volume. Michael Saylor’s firm was a significant contributor to this volume.
The current price of Bitcoin is $98,423, approximately 1.5% below the $100,000 threshold, according to CoinGecko data.