MicroStrategy, an American software technology firm, has successfully completed an $800 million convertible note offering. The company used the proceeds from the offering to purchase an additional 12,000 BTC for its Bitcoin treasury reserve.
On March 6, MicroStrategy announced its intention to offer a new round of convertible notes, coinciding with Bitcoin reaching a new all-time high. The private offering was completed on March 8, with a total value of $800 million.
MicroStrategy founder and chairman, Michael Saylor, confirmed on the social media platform X that the net proceeds from the note offering, along with excess cash, were used to acquire 12,000 Bitcoin at an average price of $68,477 per BTC.
Prior to this latest purchase, MicroStrategy held approximately 193,000 BTC at an average price of $31,544. This represented a balance of $12.9 billion and a return of 112% since the company began investing in Bitcoin. Saylor confirmed that MicroStrategy now holds 205,000 BTC, acquired for $6.91 billion at an average price of $31,500 per coin.
The recent note offering by MicroStrategy carries an interest rate of 0.625% per annum and is payable semi-annually in March and September starting from September 2024. The notes are convertible into cash, MicroStrategy stocks, or a combination of both.
The initial conversion rate for the notes is 0.6677 shares of MicroStrategy’s class A common stock per $1,000 principal amount of notes. This is equivalent to an initial conversion price of approximately $1,497.68 per share.
In August 2020, MicroStrategy made headlines by allocating a significant portion of its capital directly into Bitcoin holdings. The decision, led by the company’s Bitcoin proponent chairman, started with a $250 million investment, resulting in the acquisition of 21,454 BTC for the company’s treasury holdings.
Saylor stated at the time that the investment was driven by the belief that Bitcoin is a reliable store of value and an attractive long-term investment asset. He also emphasized that Bitcoin was a superior investment compared to holding fiat currency, making it the company’s primary holding in its treasury reserve strategy. By early January 2024, MicroStrategy’s Bitcoin holdings had already increased by over $1 billion.