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MicroStrategy Announces 1 Billion Purchase of Bitcoins

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MicroStrategy Announces 1 Billion Purchase of Bitcoins

To purchase of bitcoins worth 1 billion, a company can sell its shares The company also announced a successful placement of $ 500 million of bonds to be invested in bitcoin.

MicroStrategy can sell up to $ 1 billion of its own shares for additional investment in bitcoin. The company published the corresponding application for the Securities and Exchange Commission (SEC) on its own website. The decision was preceded by the successful placement of convertible senior bonds for $ 500 million. Strong demand from investors allowed increasing the volume of placement from the initial $ 400 million to $ 500 million and lowering the coupon rate range from 6.25-6.5% to 6.125% per annum.

“The funds raised will go towards general corporate purposes, including the acquisition of the first cryptocurrency […] Management will retain the right to distribute the funding received,” – the prospectus says.

Yesterday, June 14, MicroStrategy announced that it has completed a $ 500 million bond placement. These funds will also be invested in bitcoin.

The first cryptocurrency is traded at $ 40.1 thousand, over the past day it has risen in price by 1.5%. After the announcement of the company, its shares rose sharply. At the close of the session on Monday, the value of MicroStrategy securities on the Nasdaq rose 16% to $ 598.

At the moment, MicroStrategy is the largest Bitcoin holder among public companies. According to CEO Michael Saylor, the company owns 92,000 BTC. In the near future, after the acquisition of cryptocurrency for another $ 500 million, this amount may exceed 100 thousand.

Recall that in February 2021, to raise funds for the purchase of digital gold, MicroStrategy placed $ 1.05 billion in unsecured convertible senior bonds.

In December 2020, the company sold similar securities to investors in the amount of $ 650 million.

After announcing plans to issue convertible bonds, Citi analysts downgraded their recommendations for MicroStrategy Inc. shares, which subsequently went down sharply.

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