MicroStrategy to raise another $700 million to buy Bitcoin through debt offering

On September 16, MicroStrategy founder Michael Saylor announced that the company was planning its third debt offering this year, aiming to raise $700 million through the issuance of convertible senior notes.

The figure is the full principal amount and there is an option for an additional $105 million in notes due September 2028.

Buy more Bitcoins

The company stated that it intends to use the net proceeds of this offering to repay existing debt and repay $500 million in outstanding senior secured notes.

MicroStrategy announces a proposed $700 million private offering of convertible senior notes $MSTR https://t.co/OCq7wj2u0P

— Michael Saylor⚡️ (@saylor) September 16, 2024

The company stated that it intends to use some of the proceeds to acquire additional Bitcoin, reinforcing its commitment to its BTC strategy. Any balance of the net proceeds will be used “to acquire additional Bitcoin and for general corporate purposes,” he said.

Marathon Digital Holdings President and CEO Fried Thiel, he commented:

“Well that’s 12,500 less BTC for the rest of us to acquire…”

Peter Schiff, serial Bitcoin discoverer he said“No more,” before adding: “What happens when MSTR is the only buyer left? There is a limit to the amount of debt MSTR can issue to prevent the pyramid from collapsing.”

By redeeming the Senior Secured Notes, MicroStrategy will release approximately 69,080 BTC currently used as collateral.

Convertible senior bonds are a type of debt security that can be converted into a predetermined amount of the issuing company’s equity at certain times during the life of the bond. They are called “senior” obligations because they have priority over other forms of debt in the event of bankruptcy.

This is MicroStrategy’s third debt offering of 2024. The company raised about $700 million in a similar offering in March and then again in June when it raised $500 million.

MicroStrategy BTC Holdings

MicroStrategy currently holds 244,800 BTC worth about $14.24 billion at current market prices. The company’s last acquisition was 18,300 BTC worth about $1.1 billion, announced on September 13.

According to the Saylor Tracker website, the company has an average dollar cost of $38,781 per BTC. This gives you an overall unrealized profit of around 50% for all aggregate BTC purchases.

However, shares of the company ( MSTR ) fell 4.9% on Monday and ended the day at $134.50, according to Google Finance.

MicroStrategy shares have largely mirrored Bitcoin prices, hitting a high in March, but have since fallen 30%. Bitcoin is currently trading down 21.3% from its March high.

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