MicroStrategy bets big on bitcoin: just issued $500 million in notes, wants to “expand” with another $1 billion

MicroStrategy is already betting more than $3.7 billion on bitcoin.

MicroStrategy, a NASDAQ-listed company under the leadership of CEO Michael Saylor, is already “AII In” on bitcoin.

According to preliminary statistics, MicroStrategy has placed more than $3.7 billion in bets on bitcoin, ranking first among all institutions that have disclosed relevant information. This has made it the largest bitcoin long on the public market.

Take a look at MicroStrategy’s history of buying bitcoin.

MicroStrategy first disclosed using the company’s own cash to buy and hold bitcoin on August 11, 2020, and has since made four additional investments in a row, using a total of $500 million of its own funds to purchase 41,433 bitcoins.

On December 20, 2020 and February 24, 2021, the Company issued convertible debt to raise a total of $1.7 billion and purchased 48,868 bitcoins. As of March 2021, MicroStrategy has used a total of $2.2 billion in funding to purchase 90,301 Bitcoins.

After Bitcoin’s sharp retreat to below $40,000 in May 2021, MicroStrategy started its buying rhythm again.

On June 7, 2021, in a filing with the U.S. Securities and Exchange Commission (SEC), MicroStrategy announced that it would issue $400 million in aggregate principal amount of senior notes due 2028, as permitted by the Securities Act, with the net proceeds from the sale of the notes to be used to purchase additional bitcoins, subject to market and other factors.

The filing also reveals MicroStrategy’s return on its investment in bitcoin, and based on the volatility of the bitcoin price in the second quarter of 2021, as of the date of the report, the company expects to record a loss of at least $284.5 million related to bitcoin for the three months ending June 30, 2021.

Despite the $280 million loss recorded, MicroStrategy’s planned offering of senior notes due 2028 was enthusiastically subscribed by investors. According to Bloomberg, sources have revealed that the notes have been subscribed for more than $1.6 billion, with a large number of hedge funds among the subscribers.

On June 9, 2021, MicroStrategy raised its offering of senior secured notes due 2028 to a total of $500 million with an interest rate of 6.125% per annum, underwritten by investment bank Jefferies Financial Group Inc.

On June 15, 2021, MicroStrategy announced the closing of its senior notes due 2028 offering. The notes in the offering have an aggregate principal amount of $500 million and carry an interest rate of 6.125% per annum.

MicroStrategy said the net proceeds from the sale of the notes and related guarantees, net of initial purchaser discounts and commissions and estimated offering expenses payable by MicroStrategy, were approximately $488 million, which will be used to continue the purchase of bitcoin.

On the same day (June 15, 2021), MicroStrategy disclosed in a filing with the SEC that it intends to raise $1 billion in a “capital raise” to increase its bitcoin holdings again. MicroStrategy disclosed in its SEC filing that it intends to sell up to $1 billion of its Class A common stock over a flexible period of time through a “mark-to-market” securities offering, with the net proceeds from the sale to be used for general corporate purposes, including the acquisition of bitcoin, in accordance with any net proceeds of Class A common stock provided in the prospectus.

Just as it will take time to see if Michael Saylor is a true bitcoin believer, it will also take time to see if MicroStrategy’s bet on bitcoin will be successful.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/microstrategy-bets-big-on-bitcoin-just-issued-500-million-in-notes-wants-to-expand-with-another-1-billion/
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