On September 16, Michael Saylor, the founder of MicroStrategy, revealed that the company is planning to conduct its third debt issuance this year, intending to raise $700 million through convertible senior notes.
This amount represents the total principal, with an option for an additional $105 million in notes due in September 2028.
Acquiring Additional Bitcoins
The company announced its plans to utilize the net proceeds from this offering to settle existing debts and redeem $500 million in secured notes currently outstanding.
MicroStrategy Announces Proposed Private Offering of $700M of Convertible Senior Notes $MSTR https://t.co/OCq7wj2u0P
— Michael Saylor
(@saylor) September 16, 2024
The organization indicated that part of the proceeds will be used to purchase more Bitcoin, reaffirming its dedication to its BTC strategy. Any remaining net proceeds are set to be utilized “to acquire additional Bitcoin and for general corporate purposes,” as stated by the company.
Chairman and CEO of Marathon Digital Holdings, Fried Thiel, stated:
“Well, that’s another 12,500 BTC less for the rest of us to acquire…”
Peter Schiff, known for his critical views on Bitcoin, remarked, “Not again,” further commenting, “What happens when MSTR is the only buyer left? There is a limit to how much debt MSTR can issue to keep the pyramid from collapsing.”
By redeeming the secured notes, MicroStrategy will unlock approximately 69,080 BTC that is currently held as collateral.
Convertible senior notes are a form of debt security that may be converted into a set amount of the issuing company’s equity at specified intervals during the bond’s term. They are classified as “senior” obligations due to their precedence over other debt forms in case of bankruptcy.
This marks MicroStrategy’s third debt offering of 2024. Previously, the company raised about $700 million through a similar offering in March and a further $500 million in June.
MicroStrategy Bitcoin Holdings
Currently, MicroStrategy owns 244,800 BTC valued at approximately $14.24 billion based on current market rates. The firm’s most recent acquisition was 18,300 BTC, worth about $1.1 billion, which was disclosed on September 13.
According to the Saylor Tracker site, the company’s dollar cost average stands at $38,781 per BTC, yielding an overall unrealized profit of roughly 50% on all BTC purchases.
However, the company’s stock (MSTR) experienced a decline of 4.9% on Monday, closing at $134.50, as reported by Google Finance.
The performance of MicroStrategy shares has primarily mirrored Bitcoin’s fluctuations, peaking in March but subsequently decreasing by 30%. Bitcoin has likewise seen a drop, currently trading 21.3% below its March high.
Binance Free $600 (CryptoPotato Exclusive): Use this link to register a new account and get a $600 exclusive welcome offer on Binance (full details).
LIMITED OFFER 2024 at BYDFi Exchange: Up to $2,888 welcome reward, use this link to register and open a 100 USDT-M position for free!