MicroStrategy, an American software technology firm, has successfully completed an $800 million convertible note offering. The funds raised from this offering were used to acquire an additional 12,000 BTC for MicroStrategy’s Bitcoin treasury reserve.
The company announced its plan to offer a new round of convertible notes on March 6, coinciding with Bitcoin’s surge to a new all-time high. The private offering was concluded on March 8, with a total principal amount sold valued at $800 million.
MicroStrategy founder and chairman, Michael Saylor, confirmed on the social media platform X that the net proceeds from the note offering, along with excess cash, were used to purchase 12,000 Bitcoin at an average price of $68,477 per BTC.
Before this latest acquisition, MicroStrategy already held approximately 193,000 BTC at an average price of $31,544. This represented a balance of $12.9 billion and a return of 112% since the company’s inception. Saylor revealed that MicroStrategy now holds 205,000 BTC, which were acquired for $6.91 billion at an average price of $31,500 per coin.
The latest note offering by MicroStrategy carries an interest rate of 0.625% per annum and is payable semi-annually from September 2024 onwards. 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. 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. The company’s chairman, a strong advocate for Bitcoin, spearheaded this decision, starting with an initial $250 million investment that gave MicroStrategy 21,454 BTC for its treasury holdings.
At the time, Saylor emphasized that the investment was driven by the company’s belief in Bitcoin as 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 primary 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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