MicroStrategy will use proceeds from convertible note sale to add to bitcoin stash

MicroStrategy’s stock was up over 20% in intraday trading Monday

March 4, 2024 04:36 pm

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MicroStrategy’s ready to add to its bitcoin stash, and it’s utilizing a $600 million private offering of convertible senior notes to do it.

According to a press release on Monday, the company intends to use the “net proceeds from the sale of the notes to acquire additional bitcoin and for general corporate purposes.”

The announcement comes as bitcoin nears its all-time high of $69,000, and the company’s stock, which trades under the ticker MSTR, nears highs not seen in over 20 years.

The stock closed the day up 23% to $1,334 a share. Over the past year, MicroStrategy is up 461%. Following the announcement, the stock tumbled 5% in after-hours trading.

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“The notes will be unsecured, senior obligations of MicroStrategy and will bear interest payable semi-annually in arrears on March 15 and Sept. 15 of each year, beginning on Sept. 15, 2024. The notes will mature on March 15, 2030, unless earlier repurchased, redeemed or converted in accordance with their terms,” the company explained in the press release.

Offering senior notes — which is a debt security — is a way for the company to raise funds.

The software company is well-known for its bitcoin holdings. In February, it increased those holdings to 193,000 bitcoin worth nearly $13 billion at current prices. As of publication time, bitcoin (BTC) was trading around $67,000.

The company added 850 more bitcoin to its balance sheet just last month.

Michael Saylor, co-founder of MicroStrategy, reaffirmed his bullish stance on bitcoin. Last month, he told Bloomberg TV that “bitcoin is the exit strategy.”

Bitcoin’s price has been on a tear since last week, as bitcoin flirts with its all-time high — and surpasses levels not seen since 2021 — and the bitcoin ETFs notched record volumes.

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