MicroStrategy increases stock sale to $700 million to buy more Bitcoin
MicroStrategy, led by CEO Michael Saylor, has increased the size of its planned stock sale to raise additional funds for Bitcoin purchases. The company is now targeting $700 million, up from the $500 million previously announced.
BREAKING NEWS: MicroStrategy increases funding to $700 million for additional purchases. #Bitcoin pic.twitter.com/B2I2uk98Ie
— Bitcoin Magazine (@BitcoinMagazine) June 14, 2024
MicroStrategy first announced plans on Thursday to raise $500 million by selling convertible senior notes to qualified institutional buyers. Proceeds will primarily be used to acquire more Bitcoin for corporate treasury. It already contains over 214,400 BTC worth $15 billion.
The software analytics company increased its offer to $700 million on Friday. The company said the offer is scheduled to close on June 17.
MicroStrategy has been aggressively accumulating Bitcoin since 2020 under Saylor’s direction. Utilizes debt to finance Bitcoin purchases by taking advantage of market volatility. The company cited its confidence that Bitcoin will continue to rise over the long term.
Selling convertible senior notes gave MicroStrategy flexibility. The bonds will pay interest and mature in 2032, but bondholders can convert them into MicroStrategy stock before maturity.
This structure allows investors to benefit from potential Bitcoin price appreciation through a stock conversion option. It also protects bondholders from downside risk due to their senior unsecured status.
MicroStrategy stated that proceeds not allocated to Bitcoin purchases may be used for general corporate purposes. However, the intention to expand Bitcoin assets while the price is depressed is clear.
The additional capital injection signals MicroStrategy’s continued confidence in Bitcoin as its primary treasury reserve asset. Saylor is doubling down by acquiring more coins amid the current market turmoil.
