Breaking: MicroStrategy Increases Security Debt Offering to $550 Million

Published by

Updated 09 Dec, 2020 | 01:52:51 PM UTC

Breaking: MicroStrategy Increases Security Debt Offering to $550 Million

MicroStrategy, the software and business infrastructure provider recently announced that it would be offering $400 million worth of convertible notes for investors and it would utilize the funds to buy more bitcoin. The firm today revealed that it has upsized the debt offering to $550 million along with the pricing details of their debt security offering.

The latest set of documents revealed that the software giants would offer $550 million at an interest rate of 0.750% per annum in convertible notes to qualified institutional investors. A convertible note is generally used to cash in debt securities in the form of either company shares or liquid cash or a combination of both. Institutional buyers would buy and hold the convertible notes to earn interest on them until the maturity period of December 15, 2025.

MicroStrategy has already bought nearly $500 million worth of bitcoin in a series of purchases that the firm made this year. However, their decision to raise about $400 million through security debt and use the funds to buy more bitcoin hasn’t really impressed many. In fact, it led Citibank to downgrade its stock from “neutral” to “buy”.

The downgrading of stocks led to a price crash for MicroStrategy stocks seeing a decline of almost 14% from its daily high. However, it seems the downgrade followed by a price crash hasn’t deterred the software giant from their belief in the top cryptocurrency, as they increased their offering by 150 million more.

Preston Pysh, an investment guru was not really impressed with the interest rate of 0.75% and even called it funny. He said,

Who in Sam hell is buying these notes. That interest rate is hilarious. Good for you! Your good standing is why you’re able to do this, but what fools on the other side of the trade…

The criticism for Microstrategy’s over-the-top enthusiasm for bitcoin is mainly coming from mainstream financial circles, however, crypto enthusiast sees this move as a sign of expanding market and a form of Bitcoin ETF until the real one gets approved.

Prashant Jha

An engineering graduate, Prashant focuses on UK and Indian markets. As a crypto-journalist, his interests lie in blockchain technology adoption across emerging economies.

Published by

Prashant Jha

Updated 09 Dec, 2020 | 01:52:51 PM

Why trust CoinGape: CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journalists and analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.

Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.