MicroStrategy to Issue $400 Million in Securities to Buy More Bitcoin

Leading business intelligence firm, MicroStrategy, is betting on Bitcoin, announcing a stock offering to raise $400 million to invest in BTC.

MicroStrategy, the world’s largest business intelligence firm, has announced plans to invest the proceeds of a $400 million securities offering in Bitcoin.

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On December 7, the firm revealed its plans to issue $400 million in senior convertible notes, a debt security that can be converted into shares of the issuing company. The announcement said:

„Microstrategy intends to invest the net proceeds from the sale of the notes in Bitcoin.

At current prices, the $400 million would increase the company’s holdings by 20,833 BTC, bringing the company’s total reserve to nearly 62,000 BTC.

Microstrategy will pay half-yearly interest to note holders until December 2025. The firm also reserves the right to exchange the notes for cash as of December 20, 2023.

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The announcement states that MicroStrategy may also offer up to an additional $60 million in promissory notes to its initial buyers within 13 days of the start of the offer.

The securities will be issued in accordance with Rule 144 of the Securities Act and will be available only to qualified institutional investors.

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In response to MicroStrategy’s announcement, Gabor Gurbacs, CEO of New York-based investment firm VanEck, suggested that the offering is more indicative of a digital asset fund than a publicly traded company:

At what point does an offering of securities that raises dollars for the purpose of investing in Bitcoin turn a publicly traded company into a fund/investment company?

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MicroStrategy caused a sensation in the world of crypto-currency during August, when the company revealed that it had adopted Bitcoin as its main reserve asset after buying 21,454 BTC for USD 250 million. It then bought another 16,796 BTC for USD 175 million the following month. The purchases were made through Coinbase’s brokerage and OTC platform.

Just a few days ago, on December 5, MicroStrategy CEO Michael Saylor announced that the company had purchased another 2,574 BTCs at a price of approximately USD 19,427 each for USD 50 million, bringing its total holdings of crypt coins to approximately 40,824 BTCs.

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At current market value, MicroStrategy’s BTC reserve is worth nearly $784 million, which means that the company currently has a 65% increase in its investment of $475 million.