American software technology firm MicroStrategy has successfully concluded an $800 million convertible note offering, earmarking the proceeds for the acquisition of an additional 12,000 BTC for its Bitcoin treasury reserve.
MicroStrategy unveiled its plan to initiate a fresh round of convertible notes on March 6, coinciding with Bitcoin reaching a new all-time high. The private offering was finalized on March 8, with the aggregate principal amount sold totaling $800 million.
Founder and chairman Michael Saylor confirmed via social media that the net proceeds from the note offering, along with surplus cash, were utilized to procure 12,000 BTC at an average price of $68,477 per BTC.
Prior to this latest acquisition, MicroStrategy held approximately 193,000 BTC, acquired at an average price of $31,544. This amounted to a balance of $12.9 billion, representing a remarkable return of 112% since the inception of its Bitcoin acquisitions. With the latest purchase, MicroStrategy‘s Bitcoin holdings have increased to 205,000 BTC, acquired for $6.91 billion at an average price of $33,706 per coin.
The notes from MicroStrategy’s latest offering bear an interest rate of 0.625% per annum, payable semi-annually from September 2024 onwards. They are convertible to cash, MicroStrategy stocks, or a combination thereof. The initial conversion rate is set at 0.6677 shares of MicroStrategy’s class A common stock per $1,000 principal amount of notes, translating to an initial conversion price of around $1,497.68 per share. This represents a premium of approximately 42.5% over the last reported sale price of MicroStrategy’s class A common stock.
MicroStrategy garnered attention with its decision in August 2020 to allocate a significant portion of its capital to Bitcoin holdings. Spearheaded by Saylor, the initiative commenced with a $250 million investment for 21,454 BTC. Saylor emphasized Bitcoin’s reliability as a store of value and its potential for long-term appreciation compared to holding cash. The company reaffirmed Bitcoin as its principal holding in its treasury reserve strategy, with its Bitcoin holdings witnessing substantial growth, exceeding $1 billion by early January 2024.
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