MicroStrategy, the largest corporate holder of Bitcoin, announced plans to raise $1.75 billion through senior convertible notes to buy more Bitcoin and fund general corporate activities. The company, led by Bitcoin proponent Michael Saylor, continues to expand its Bitcoin holdings.
The fundraising will be conducted through 0% interest senior convertible notes, which do not pay regular interest. Instead, these notes are issued at a discount and will mature at face value in 2029 if not converted. The notes give holders priority over common stockholders in cases like bankruptcy or liquidation. If MicroStrategy uses the entire $1.75 billion raised to buy Bitcoin, it could acquire an additional 19,065 BTC at current prices. The company currently holds 331,200 BTC, worth $30.3 billion, including $4.6 billion worth purchased on Nov. 18.
The announcement came on Nov. 18, as Bitcoin trades near its all-time high of $93,477, reached on Nov. 13. MicroStrategy shares also saw a significant rise, closing up nearly 13% at $374.80 on Nov. 18, before a slight 0.7% dip in after-hours trading.
This move solidifies MicroStrategy’s dominance in Bitcoin acquisitions, influencing both the cryptocurrency market and traditional finance sectors. The company’s actions are closely monitored by institutional investors and the broader crypto community.
MicroStrategy’s strategy reflects its strong confidence in Bitcoin as a long-term asset. With a 133% gain on its Bitcoin investments, the company has purchased its holdings at an average price of $39,292 per BTC. The $1.75 billion raise is part of the company’s broader “21/21” plan, announced last month, which aims to secure $42 billion in funding over three years—half through equity and half through fixed-income securities—to expand its Bitcoin reserves.
The 0% convertible notes allow MicroStrategy to raise funds without incurring interest obligations. These instruments provide investors with the option to convert their notes into shares while prioritizing them over equity holders in case of liquidation. By leveraging innovative financing methods, MicroStrategy continues to bolster its position as a leader in corporate Bitcoin adoption, capitalizing on Bitcoin’s current price of $91,653, just shy of its record high.
