MicroStrategy plans to sell $400M to senior convertible notes in a private sale. It wants to use funds from the sale to buy more Bitcoin.
The company already holds 40,824 BTC on its books. The most current purchase came on December 4, when it bought 2,754 BTC for $50M.
Michael Saylor, a bitcoin bull that leads MicroStrategy, clearly wanted more. A press release issued recently says that MicroStrategy intends to invest the net proceeds from the sale of the notes in bitcoin under its Treasury Reserve Policy pending the identification of working capital needs and other general corporate purposes.
It is a debt security that allowed the holder to convert the value into cash, shares in the company, or a combination of the two. Holders will receive interest on the notes, which will mature in December 2025, twice each year. MicroStrategy could buy out the letters in cash in December 2023.
This move is a way of rapidly raising cash from big investors. But depending on the state of MicroStrategy’s balance sheet, it can pin the company’s fate on not just the products and services but the continued performance of bitcoin.
The company’s first critical Bitcoin purchase is a $250M grab in August when the price hovered at around $11,700 set the tone for what has been a bull run on Bitcoin by institutional investors. Bitcoin is now $19,100.
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