MicroStrategy completes its $650 Million Convertible Notes offering, to invest proceeds into Bitcoin

MicroStrategy, the Business Intelligence software firm intends to plough the returns from the Convertible Notes offering into Bitcoin.

By · Dec 14, 2020 . 5min read

MicroStrategy $650 Million Convertible Notes news

Business Intelligence software firm Microstrategy has completed its proposed $650 million convertible notes offering which matures in 2025; it will be ploughing its proceeds into Bitcoin upon maturity.

The latest Bitcoin darling offered her investors up to 0.750% convertible senior notes due 2025. Moreover, it went on to raise $650 million in a private offering from December 9th to run for 13 days. However, investors bought up the notes convertible to shares by December 12th.

Only accredited institutional buyers, according to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”) participated. Per the announcement,

The notes are convertible into cash, shares of MicroStrategy’s class A common stock, or a combination of cash and shares of MicroStrategy’s class A common stock, at MicroStrategy’s election

MicroStrategy to direct earning from convertible notes to Bitcoin purchase

The firm intends to plough the returns from the Convertible Notes offering into Bitcoin.

MicroStrategy intends to invest the net proceeds from the sale of the notes in bitcoin in accordance with its Treasury Reserve Policy pending identification of working capital needs and other general corporate purposes.

This is significant as MicroStrategy is already the largest publicly-traded company holding Bitcoin. According to Bitcoin Treasuries directory, MicroStrategy currently holds 40,824 Bitcoins. Technically, even if all the Fortune 500 companies decide to start investing in Bitcoin today, they wouldn’t all be able to amass the stash MicroStrategy holds.

Even MicroStrategy’s recent Bitcoin purchase was at a price above $19,000. Although, Bitcoin did fall to the $17k region and now back up. While critics keep calling out MicroStrategy’s recent bullish stance on Bitcoin, its share price has also risen.

Microstrategy completes its $650 Million Convertible Notes offering, to invest proceeds into Bitcoin

Within the last six months, its share price has doubled before correcting to its current price at $285. MicroStrategy is already in huge gains with the Bitcoins is acquired in August and September. However, Michael Saylor, the founder and CEO of MicroStrategy, made it clear that his firm plans to hold for 100 years.

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