Microstrategy Ready to Buy $650M of Bitcoin
3 min readMicroStrategy has already concluded its sale of $650 million in convertible bonds. The company will use the proceeds from the sale to buy more bitcoin.
MicroStrategy is already one of the largest corporate holders of the digital currency. However, the more than 40,000 BTC it holds is clearly not enough for CEO Michael Saylor.
MicroStrategy’s bond sale raises $150 million more than expected
MicroStrategy and its CEO Michael Saylor have quickly become one of the cryptocurrency industry’s biggest talking points. The company captured attention when it announced in August this year that it had used part of its treasury reserve to buy bitcoin.
MicroStrategy subsequently bought more, taking its total holdings to over 40,000 BTC. Saylor also announced personal holdings of more than 17,000 bitcoin in October.
However, around $730 million in bitcoin exposure clearly wasn’t enough for the company. As BeInCrypto reported, the firm revealed plans on Dec. 8 to raise $400 million to buy more BTC.
On Friday, MicroStrategy announced the conclusion of the sale of its convertible bonds. According to a statement published by the company, it generated an additional $150 million, taking the total raised to $650 million.
The convertible senior notes, with a rate of 0.75%, were sold to institutional buyers. The identities of said buyers remain unknown.
The notes are due to mature on Dec. 15, 2025. MicroStrategy will retain the option to redeem them for cash, shares of MicroStrategy common stock, or a combination of the two.
Is MicroStrategy too focused on bitcoin?
When Saylor first announced MicroStrategy’s bold bitcoin bet, its stock price soared. This has prompted some to comment that investments in MicroStrategy represent a way for those investors unable to buy BTC to take exposure to the asset’s price.
However, the recent bond sale has caused some observers to change their views. On Dec. 8, Citibank analysts downgraded the firm’s stock from ‘neutral’ to ‘sell’.
The bank claimed that Saylor now appears too focused on the cryptocurrency industry. There are concerns that this may be detrimental to its business operations. However, Saylor’s bet is paying off thus far. The vast majority of both his company’s and personal holdings were purchased at much lower prices.
Large-scale help in changing BTC sentiment
MicroStrategy is just one of a number of interests starting to take bitcoin seriously this year. Legendary investors such as Paul Tudor Jones, major financial institutions such as JP Morgan, and other publicly listed companies have all expressed optimism about bitcoin’s future or made investments in it in recent months.
The most recent company to take up a major position in the digital currency was Massachusetts Mutual. The 170-year-old life insurance firm reportedly bought $100 million of BTC. It also invested $5 million in crypto-focused financial services company NYDIG.
The recent institutional interest in bitcoin has many analysts predicting an upcoming supply shock for the digital asset. With Grayscale, PayPal, and Square already buying more BTC than miners can mine, continued demand-side pressure looks set to take price to new highs.
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