MicroStrategy, an American software technology firm, has successfully completed an $800 million convertible note offering, using the funds to add an additional 12,000 BTC to its Bitcoin treasury reserve.
On March 6, MicroStrategy announced its intention to offer a new round of convertible notes, coinciding with Bitcoin’s surge to a new all-time high. The private offering was concluded on March 8, with the total principal amount sold amounting to $800 million.
MicroStrategy founder and chairman, Michael Saylor, confirmed on social media platform X that the net proceeds from the note offering, along with excess cash, were used to acquire 12,000 more Bitcoin at an average price of $68,477 per BTC.
Prior to this recent purchase, MicroStrategy held approximately 193,000 BTC at an average price of $31,544, representing a total balance of $12.9 billion and a return of 112% since the company’s inception. Saylor revealed that MicroStrategy’s BTC holdings now stand at 205,000, acquired for $6.91 billion at an average price of $31,5000 per coin.
The latest note offering by MicroStrategy carries an interest rate of 0.625% per annum and will be payable semi-annually in March and September starting from September 2024. The notes can be converted into cash, MicroStrategy stocks, or a combination of both.
The initial conversion rate for the notes is set at 0.6677 shares of MicroStrategy’s class A common stock per $1,000 principal amount of notes. The company states that this is equivalent to an initial conversion price of approximately $1,497.68 per share.
MicroStrategy made headlines in August 2020 when it decided to allocate a significant portion of its capital directly into Bitcoin holdings. Spearheaded by the company’s Bitcoin advocate chairman, the initial investment of $250 million resulted in MicroStrategy acquiring 21,454 BTC for its treasury holdings.
Saylor emphasized that the decision was based on the belief that Bitcoin is a reliable store of value and an attractive long-term investment asset. He also stated that Bitcoin was a superior investment compared to holding fiat currency, making it the principal holding in MicroStrategy’s treasury reserve strategy. By early January 2024, the company’s Bitcoin holdings had already increased by over $1 billion.
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