MicroStrategy Closes $500M Offering for Bitcoin Purchase

Share this article

Institutional investors quickly bought up $500 million worth of senior debt notes issued by MicroStrategy. The firm will use the nine-figure sum to buy Bitcoin. 

MicroStrategy Still Bullish on Bitcoin 

MicroStrategy is prepping for yet another significant Bitcoin purchase. 

The business intelligence firm announced that it had completed its $500 million offering for newly issued debt notes Monday. The notes bear an annual interest rate of 6.125% for a period of seven years; the senior secured notes are due in 2028. 

MicroStrategy estimates that the net proceeds from the sale of the notes and the related guarantees will be approximately $488 million after deducting initial discounts and other expenses.

The firm holds 92,079 BTC in its balance sheet, which means it should have over 100,000 coins after using the proceeds from the debt notes. That’s more than any other publicly traded company. It started purchasing Bitcoin from the company’s cash balance in September. The company then issued $1.6 million in debt in 2020 to make another investment. It has also bought more BTC in smaller amounts of $10-15 million over the last few months. 

Bitcoin’s price jumped on Sunday after confirmation of an important update in its codebase coupled with Elon Musk’s confirmation that Tesla would retract its decision to stop accepting Bitcoin payments if 50% of the asset’s mining came from clean energy sources. Veteran investor Paul Tudor Jones also stirred positive sentiments after doubling down on his Bitcoin investment as an inflationary hedge Monday.

MicroStrategy’s incoming $500 million buy has further instilled bullishness in the market. Bitcoin was last trading at $40,734.

Share this article