Business analytics and mobility platform, MicroStrategy Inc. is borrowing $400 million to buy more Bitcoin while also writing down the value of its existing holdings. It’s the first-ever junk bond sale used for financing purchases of Bitcoin.
The publicly traded business intelligence firm said it intends to offer $400 million senior secured notes to raise funds to purchase more bitcoin even as the bitcoin it already has will likely result in a massive impairment.
The company CEO, Michael Saylor has been one of the leading advocates of converting company cash to Bitcoin, saying that the Federal Reserve’s relaxing of its inflation policy helped convince him to invest MicroStrategy’s reserves.
MicroStrategy disclosed in May that it holds approximately 92,079 Bitcoins, which it says were acquired for about $2.25 billion at an average of about $24,450 per token. The company said it has formed a new subsidiary, MacroStrategy LLC, which will hold its current stash of 92,079 bitcoin.