MicroStrategy (MSTR 4.46%) published a press release on Tuesday morning announcing that it plans to raise $600 million through the private sale of convertible senior notes. The proceeds of the sale would go toward buying more Bitcoin (BTC 0.98%).
The option to purchase the notes will be available only to qualified institutional buyers, and MicroStrategy also plans to offer initial purchasers an option to buy more notes in an additional offering in the amount of $90 million. That would bring the fundraising target raised through the potential sale to $690 million, with all net proceeds intended to go toward buying more Bitcoin tokens.
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The notes would pay an undisclosed amount of interest on a semiannual basis starting on Aug. 15 and mature in mid-February 2027. But MicroStrategy's current plan would also give the company the option to repurchase or redeem the notes in February 2024 providing certain conditions (currently undisclosed) are met. MicroStrategy would have the option to pay noteholders either in cash, class A shares of its common stock, or a combination of the two.
As of its last official disclosure, MicroStrategy reported owning 71,079 Bitcoin tokens. That holding would be worth roughly $3.53 billion based on Bitcoin's current price of roughly $49,660 per token. Bitcoin has surged to new highs early in 2021 and has been buoyed by increased institutional support and integration on fintech platforms and support from some high-profile companies, including Tesla.
MicroStrategy's share price has surged roughly 595% over the last year, with the incredible gains being largely driven by huge pricing surges for Bitcoin tokens. Despite Bitcoin's incredible rally, MicroStrategy's plan to make more big buys shows the company is still very bullish on the cryptocurrency's future.
