MicroStrategy, a leading business intelligence firm, recently announced the successful completion of its $3 billion offering of 0% convertible senior notes due in December 2029. The funds raised will likely be used to acquire additional Bitcoin. This announcement came just as the firm’s shares experienced a significant dip — more than 25% — on November 21, according to data from Google Finance.
In financial terms, these convertible senior notes, having been sold at a 55% premium, do not offer regular interest payments to bondholders. Instead, bondholders will receive their returns when these notes reach maturity. In case of the company’s bankruptcy or liquidation, convertible note holders are given payment priority.
This is another strategic move by MicroStrategy to continue to grow its Bitcoin holdings. Current estimates suggest that the company could purchase around 30,600 Bitcoin with the raised $3 billion. This follows its November 18 plans to raise an additional $1.75 billion, which was subsequently revised to $2.6 billion on November 20.
Over the next three years, MicroStrategy aims to raise a total of $42 billion under its “21/21” plan to further increase its Bitcoin position. Currently, the company already owns 331,200 Bitcoin — the highest holdings owned by any public company, worth over $32.7 billion.
Despite its share price dip and speculative activity by Citron Research, MicroStrategy remains one of the top performers in the US markets in 2024, with a 480% increase year-to-date. Moreover, amid heated debates over Bitcoin’s future, the company contributes heavily to the record-setting $70 billion trading volume seen recently with the “Bitcoin Industrial Complex.” Current assessment places Bitcoin’s value at $98,423, a mere 1.5% short of cracking the $100,000 milestone.