Key Points
- MicroStrategy has finalized an $800 million convertible note offering, purchasing an additional 12,000 BTC.
- The company's total Bitcoin holdings now exceed 200,000 BTC, acquired at an average price of $31,500 per coin.
American software technology company, MicroStrategy, has successfully completed a new $800 million convertible note offering. The funds raised were used to increase its Bitcoin treasury reserve with an additional 12,000 BTC.
The company announced its plans for a new round of convertible notes on March 6, as Bitcoin hit a record high. The private offering was completed on March 8, with the total principal amount sold valued at $800 million.
MicroStrategy's Bitcoin Acquisition
MicroStrategy's founder and chairman, Michael Saylor, confirmed on a social media platform that the net proceeds from the note offering and excess cash were used to purchase an extra 12,000 Bitcoin at an average price of $68,477 per BTC.
Prior to this latest acquisition, MicroStrategy held approximately 193,000 BTC, purchased at an average price of $31,544, representing a balance of $12.9 billion and a return of 112% since inception.
Saylor confirmed that MicroStrategy now holds a total of 205,000 BTC, purchased for $6.91 billion at an average price of $31,500 per coin. The latest note offering carries an interest rate of 0.625% per year and is payable semi-annually in March and September, starting from September 2024.
Conversion Details and Bitcoin Strategy
The notes can be converted into cash, MicroStrategy stocks, or a combination of the two. The initial conversion rate for the notes is 0.6677 shares of MicroStrategy’s class A common stock per $1,000 principal amount of notes. The company explains that this is equivalent to an initial conversion price of about $1,497.68 per share.
In August 2020, MicroStrategy made headlines by deciding to invest a significant portion of its capital directly into Bitcoin. This decision, led by the company's chairman, started with an initial $250 million investment, providing the company with 21,454 BTC for its treasury holdings.
Saylor indicated that the investment was motivated by the company's belief that Bitcoin is a reliable store of value and an attractive investment asset with more long-term appreciation potential than holding cash. The company's Bitcoin holdings had already increased by over $1 billion in early January 2024.
