MicroStrategy Announces Private Offering of $600M Worth of Senior Notes ‘to Buy More Bitcoins’
- Microstrategy has announced their intention to sell its convertible notes to purchase bitcoin.
- They currently own about 72,000 units worth of Bitcoins
- MicroStrategy’s CEO, Michael Saylor is a known advocate of companies investing in bitcoin.
Microstrategy’s shares have fallen about 2% as of Tuesday morning after the company made public its plans to buy more bitcoins. It is known to have currently owned about 72,000 units of bitcoins as of February 2nd. That is about $3.6 billion, according to bitcoin’s current price.
Microstrategy released a press article where they stated they were willing to sell $600 million worth of senior convertible notes. Reason? It is all to buy more bitcoin. This is the second time that they have raised money to purchase cryptocurrency for the country.
Convertible notes?
As it is possible to turn convertible notes into stocks or money, Microstrategy is leveraging this to get more money in the crypto market. Its first purchase was back in August when it purchased 21,454 bitcoins. They used the cash they previously had to buy them.
It is understood that the notes that would be sold will mature on February 15th, 2027, except the company, decides to repurchase or convert them into any currency, by their terms. If Microstrategy meets some specific conditions, they will be able to redeem some of the notes or some money on or after February 20th 2024. These convertible notes can be changed into cash, Microstrategy shares, or even both. Also, only certain required events can trigger the convertibility of the letters. The pricing, as well as the interest rate will be decided at the point of transaction.
Spreading the Gospel of Crypto
Microstrategy’s CEO, Michael Saylor has always been vocal about its stance on a company’s investment in Bitcoin. His company closed some convertible notes that were worth about $650 million back in December 2020. Saylor encouraged Elon Musk, Tesla’s CEO, to invest in cryptocurrency in a conversation they had on Twitter back in December. Fast-forward to January, Tesla bought $1.5 billion worth of bitcoin. It also announced that things were being put in place to make it a payment option for its products.
Bitcoin and Microstrategy
Bitcoin’s price reached a record-high $50,000 per coin on Tuesday morning before it dropped back down. Other reputable financial companies like Mastercard have also made their intentions known towards crypto investments.
Microstrategy’s shares have been on a steady tear since it announced itself in the crypto-space back in August. Investors understand the fact that their stocks will give them fair exposure to the bitcoin market. The stocks have skyrocketed to over 660% since the company publicized its first bitcoin purchase. It reached $1,315 per unit on February 9th, its highest after 52 weeks.
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