MicroStrategy stock falls after plans to offer convertible bonds to buy Bitcoin
Shares of MicroStrategy Inc. plunged Tuesday as the business analytics software company and Bitcoin play’s planned convertible bond offering gave investors reason to take a breath after the stock recently surged to a 24-year high.
We also weigh MicroStrategy’s stock MSTR.
Bitcoin fell 1.5% after rebounding into record territory early in the session. This follows a 34% rise in Bitcoin BTCUSD.
Over the last six sessions.
MicroStrategy said late Monday that the $600 million in senior notes due 2030 it will offer are convertible into common stock, cash or a combination of the two.
The notes will be part of a private offering open to participation only by those considered “qualified institutional buyers.”
“MicroStrategy intends to use the net proceeds from the sale of the Notes to acquire additional Bitcoin and for general corporate purposes,” the company said.
The stock was down 10.5% in morning trading after closing Monday at its highest price since March 17, 2000. It is at risk of experiencing its biggest one-day selloff since November 9, 2022, when it fell 19.6%.
The decline followed a 94.1% surge in the stock price amid a six-day winning streak, the longest winning streak in four months and the largest six-day gain in three years.
read: MicroStrategy stock price rises 24%. Bitcoin surged, surpassing $1,300 for the first time in 24 years.
MicroStrategy’s market capitalization has increased by about $11 billion over the past six days, reaching $22.6 billion at the close on Monday.
The company said in its annual report filed in February that it had $2.21 billion in debt as of Dec. 31.
S&P Global Ratings rates MicroStrategy’s credit quality at CCC+. CCC+ is a grade seven levels deep into speculative grade or “junk” territory.
The company said that other items related to this bond issuance, such as interest rate and conversion price, will be determined when the price is set, but are not yet known.
Shares of MicroStrategy rose 89%, Bitcoin rose 59.5%, the SPDR S&P Software & Services ETF XSW fell 0.9% and the S&P 500 index SPX rose 6.6%.
