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MicroStrategy, Raising Cash to Buy More Bitcoin, Boosts Notes Offering to $550M
MicroStrategy anticipates raising $537 million in net proceeds from a debt sale designed to fund bitcoin speculation.
Updated Sep 14, 2021, 10:40 a.m. Published Dec 9, 2020, 2:44 p.m.
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MicroStrategy said Wednesday it anticipates raising $537.2 million in net proceeds from a debt offering the business intelligence company is conducting in its most brazen play yet to buy more bitcoin.
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- The company announced its unsecured, convertible senior notes will pay out 0.750% in interest annually to qualified institutional buyers – investors with at least $100 million under management – who buy in.
- MicroStrategy plans on selling $550 million of the debt instruments. That's a significant markup from the $400 million targeted in the original Monday announcement.
- MicroStrategy's bitcoin-first treasury reserve policy, which saw the 31-year old company plunk $475 million of excess cash in the cryptocurrency, has pushed Nasdaq-listed MSTR shares higher for weeks. But MSTR investors seem less certain in the wisdom of raising debt to buy more bitcoin.
- Tuesday, Citi analyst Tyler Radke downgraded MSTR to "sell." He argued in a research note that CEO Michael Saylor's laser-like focus on bitcoin was distracting the company from executing its business model.
- The new debt target of $550 million stands in stark contrast to Radke's rebuke.
Read more: Michael Saylor: Bitcoin's Cyber Hornet
More For You
Michael Saylor's Strategy purchased $168 million in bitcoin last week
The company's stack is now 717,131 bitcoin acquired for $54.52 billion, or $76,027 per coin. Bitcoin's current price is $68,000.
What to know:
- Strategy (MSTR) added 2,486 bitcoin for $168.4 million in the last week.
- The company's holdings now foot to 717,131 BTC acquired for $54.52 billion, or $76,027 per coin — substantially below the current price of $68,000.
- Last week's buys were funded via common stock sales and the sale of the STRC preferred series.
