MicroStrategy Increases the Value of Proposed Convertible Notes From $600M to $900M

MicroStrategy, the software solution giant yesterday announced the sale of its convertible senior notes worth $600 million to buy more bitcoin, today the company has increased the value of the offering to $900 million. The senior convertible notes act as the debt security that offers the buyer an option to convert these notes into cash, shares of MicroStrategy’s class A common stock, or a combination of cash and shares of MicroStrategy’s class A common stock,

“the pricing of its offering of $900 million aggregate principal amount of 0% convertible senior notes due 2027 (the “notes”). The notes will be sold in a private offering to qualified institutional buyers”

MicroStrategy has raised capital via the sale of security debt purchases in the past as well, the last offering being worth $650 million. While many believe buying Bitcoin using debt security is not the smartest move and CITI bank even downgraded its status to sell. The cloud software solution giant has invested over $1.5 billion in Bitcoin up until now and adding the value of the current offering their total investment would be nearly $2.5 billion.

Institutions Buying Bitcoin at $50K Suggests Higher Price Anticipation

When Bitcoin was stuck under $35k for almost a month in January many financial giants including JP Morgan were quick to call $40k the price top, however, the Tesla purchase followed by a slew of announcements from Mastercard, BNY Mellon, Twitter, and Uber regarding incorporating Bitcoin in their business has helped Bitcoin top $50k with a new ATH of over $52,400.

The fact that MicroStrategy is raising capital via debt security to buy bitcoin over $50,000 suggests institutions are still bullish on Bitcoin and they expect the price to rise further.

MicroStrategy CEO Michael Saylor who recently headed a Bitcoin conference for the firm attended by 1,400 CEOs of multi-million dollar companies said that the event turned out to be quite fruitful as many attendees which also included Tesla and SpaceX executives shared interest in buying bitcoin.