MicroStrategy Buys Another $786 Million in Bitcoin After Convertible Note Sale
Bitcoin development company MicroStrategy announced its purchase of another 11,931 BTC on Thursday, bringing its total holdings up to 226,331 coins.
The recent purchase – worth $786 million – was funded through the company’s recent convertible debt offering, which successfully raised $800 million upon closing on June 18. Each coin was bought at an average price of $65,883.
MicroStrategy has acquired an additional 11,931 BTC for ~$786.0M using proceeds from convertible notes & excess cash for ~$65,883 per #bitcoin. As of 6/20/24, $MSTR hodls 226,331 $BTC acquired for ~$8.33B at average price of $36,798 per bitcoin.https://t.co/jE9dGqqnON
— Michael Saylor⚡️ (@saylor) June 20, 2024
This marks another successful debt offering from MicroStrategy, with investors willing to accept the minimum 2.25% annual yield offered by the company’s convertible bonds.
Alternatively, investors can convert their investments into MSTR stock at a rate of $2,043.32 per share – roughly 35% above its current market price – should the stock’s value rise above this figure before the bonds expire on June 15, 2032.
This effectively amounts to a call option on MSTR stock for bond investors, with the minimum promise of getting their money back plus a small yield if things go south.
Earlier this month, MicroStrategy announced a notice of redemption on its first round of convertible bonds issued in December 2020.
Given MSTR’s drastic rise above the predetermined conversion rate of $397.77 per share, investors are largely expected to convert their shares before July 11, potentially causing major dilution for MSTR shares.
The price of MSTR has largely been dictated by the price of Bitcoin in recent years.
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