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MicroStrategy Completes $800M Note Offering, Acquires 12k BTC
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MicroStrategy Completes $800M Note Offering, Acquires 12k BTC

MicroStrategy bitcoin holdings saw an expansion of 12,000 BTC through an $800 million convertible note offering.
Alex Lari
By: Alex Lari
Mar 12, 2024
3 min read
MicroStrategy Completes $800M Note Offering, Acquires 12k BTC

American software company MicroStrategy has made headlines once again with its latest move to bolster its bitcoin holdings. The company recently completed an $800 million convertible note offering, marking a significant step in its ongoing strategy to accumulate the digital asset. The details of this development could highlights what it means for MicroStrategy’s future.

Expansion of MicroStrategy Bitcoin Holdings

MicroStrategy’s latest endeavor involves raising funds through a convertible note offering, with the primary objective of acquiring more bitcoin. This move reaffirms the company’s commitment to the digital scarce money investment and its belief in the long-term potential of bitcoin.

According to the reports, MicroStrategy successfully completed the $800 million offering of 0.625% convertible senior notes due in 2030. The offering attracted substantial interest, with the initial purchasers exercising the full $100 million option. This indicates strong investor confidence in MicroStrategy’s strategy and vision.

The starting exchange rate for the notes is 0.6677 shares of MicroStrategy’s class A common stock per $1,000 principal amount. This equates to an initial conversion price of roughly $1,497.68 per share. The company noted:

“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.”

Strategic Financial Move

MicroStrategy’s founder and chairman, Michael Saylor, emphasized the strategic significance of this financial move. The firm received around $782.0 million from selling the notes, accounting for discounts, commissions, and offering expenses paid to the initial purchasers. This amount was then utilized by MicroStrategy to purchase 12,000 bitcoin at $68,477 per coin.

This approach aligns with MicroStrategy’s broader strategy of leveraging its financial resources to invest in Bitcoin. Saylor has been vocal about his belief in Bitcoin’s potential as a store of value and an attractive investment asset.

He stated:

“a dependable store of value and an attractive investment asset with more long-term appreciation potential than holding cash.”

Bitcoin Treasury Reserve

MicroStrategy’s decision to allocate significant capital into Bitcoin dates back to August 2020 when it first announced its intention to make bitcoin its principal holding in its treasury reserve strategy. Since then, the company has been consistently adding to its bitcoin reserves, capitalizing on market opportunities and dips in price.

Related reading: A Closer Look at MicroStrategy Bitcoin Purchases

Before the latest bitcoin purchase, MicroStrategy held around 193,000 BTC at an average price of $31,544. However, with the additional 12,000 BTC acquired through the note offering, total MicroStrategy bitcoin holdings now stand at an impressive 205,000 BTC. Saylor confirmed this, stating the company has purchased $6.91 billion worth of BTC at an average price of $33,706 per coin.

Market Impact and Future Outlook

MicroStrategy’s proactive approach to bitcoin investment has not gone unnoticed in the market. The company’s bold stance on digital assets has sparked discussions among investors and analysts regarding the broader implications for corporate treasury strategies and the bitcoin market as a whole.

Despite the inherent risks associated with bitcoin investment, including market volatility, MicroStrategy remains steadfast in its belief in Bitcoin’s long-term value proposition. The company’s continued accumulation of bitcoin reflects its confidence in the asset’s ability to serve as a hedge against inflation and a store of value.

Looking ahead, MicroStrategy’s ongoing investment in Bitcoin is likely to keep it at the forefront of corporate adoption of digital assets. By leveraging its expertise in analytics and business intelligence, MicroStrategy aims to drive further innovation within the Bitcoin ecosystem, contributing to the convergence of AI and blockchain technologies.

MicroStrategy’s latest $800 million note offering marks another significant milestone in its journey to build a robust bitcoin treasury reserve. With its total bitcoin holdings now surpassing 200,000 BTC, MicroStrategy continues to lead the way in corporate adoption of digital assets. As the digital asset market evolves and matures, MicroStrategy’s strategic investments are poised to yield substantial returns, positioning the company as a key player in the digital economy.

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