MicroStrategy to Invest $400 Million in Securities to Purchase More Bitcoin

MicroStrategy, the world’s largest business intelligence firm, has announced plans to invest the proceeds of a $400 million security offering into Bitcoin. 

On December 7, the firm revealed its plans to issue $400 million in senior convertible notes, debt security that can be converted into shares of the issuing company. 

At current prices, the $400 million would raise the company’s holdings by 20,833 BTC. Thus, bringing the company’s total reserve to almost 62,000 BTC.

Microstrategy will pay semi-annual interest to holders of the notes until December 2025. The firm also reserves the right to exchange the notes for cash as of December 20, 2023. 

The announcement reveals that MicroStrategy may also offer up to an additional $60 million in promissory notes to its initial buyers within 13 days of the offering initiation. 

The securities issuing will take place under Rule 144 of the Securities Law. In fact, they will only be available to qualified institutional investors.

In response to MicroStrategy’s report, Gabor Gurbacs, CEO of New York-based investment firm VanEck, suggested that the offering is more indicative of a digital asset fund than a publicly-traded company. 

The company currently has a 65% increase in its investment

MicroStrategy caused a sensation in the crypto world during August. The company revealed that it had adopted Bitcoin as its primary reserve asset after buying 21,454 BTC for $250 million. Then it purchased another 16,796 BTC for $175 million the following month. Purchases occurred through Coinbase’s brokerage and OTC platform.

Just several days ago, on December 5, MicroStrategy CEO Michael Saylor announced that the company had purchased another 2,574 BTC. The purchase stood at a price of approximately $19,427. Resulting in each for an amount of $50 million, raising its total holding of cryptocurrencies to about 40,824 BTC. 

MicroStrategy’s BTC reserve has a valuation of nearly $784 million at current market value. It means that the company currently has a 65% increase in its investment of $475 million. 

Holding Bitcoin in the treasury will soon become a corporate standard. According to Saylor, Bitcoin was the best protection against inflation and the best store of value.  

Bitcoin is, in fact, a world store of value. It is a natural hedge against inflation. BTC is not just an American or Asian phenomenon: it is held and traded worldwide through a myriad of local exchanges. It will soon become a corporate standard as is owning treasury bonds.