MicroStrategy Raises $3B From Bond Offering, May Allocate Entire Proceeds to Bitcoin Purchase

MicroStrategy Inc (NASDAQ: MSTR), the business intelligence giant founded by Bitcoin enthusiast Michael Saylor, has successfully concluded a $3 billion offering of 0% convertible senior notes due December 2029.

MicroStrategy (NASDAQ:MSTR) has completed a $3 billion offering of 0% convertible senior notes due December 2029.

The company said in a statement on Friday that it plans to use a “substantial portion, if not all,” of the net proceeds to acquire more Bitcoin (CRYPTO: BTC).

The convertible senior notes were sold at a 55% premium and carry an implied strike price of $672 for MicroStrategy’s Class A common stock, as noted in a blog post shared by CEO Michael Saylor on X.

The 0% structure of the notes means that they do not pay regular interest to bondholders. Instead, they are sold at a discount and mature to face value unless converted before the maturity date.

The notes are also “senior” to common stock, giving holders priority in the event of bankruptcy or liquidation.

If MicroStrategy allocates the entire $3 billion to Bitcoin, it could add around 30,600 BTC to its existing reserves.

The company currently holds an impressive 331,200 Bitcoin, valued at over $32.7 billion.

This aggressive accumulation aligns with MicroStrategy’s ambitious “21/21” strategy, which aims to raise $42 billion — split equally between equity and fixed-income securities — over the next three years.

Bitcoin Surges while MSTR Stock Faces Volatility

Saylor’s latest post on X, “Sell the Past. Buy the Future,” highlights his belief in Bitcoin’s potential as a long-term asset.

As Bitcoin inches toward the $100,000 mark, MicroStrategy’s stock (MSTR) has experienced significant volatility.

MSTR shares closed at $397.28 on Thursday, showing a sharp 25% decline from its all-time high of $536.70.

Despite this pullback, MSTR remains one of the strongest performers in US markets in 2024, notching a year-to-date gain of 480%.

The company’s latest funding efforts come amid a Bitcoin bull run fueled by increased institutional interest and the recent launch of spot Bitcoin ETFs in January.

Bitcoin, currently trading near $99,000, has surged over 170% in the past year.

The recent surge gained momentum following crypto-friendly Donald Trump’s victory in the US presidential elections earlier this month.

Notably, in the past 30 days, the largest cryptocurrency has soared by around 50%.

Many are even speculating about the possibility of a government-held Bitcoin reserve in the Treasury.

A Cautious Outlook

While Bitcoin’s meteoric rise toward $100,000 has captivated traders, market sentiment indicators like the Crypto Fear and Greed Index suggest a cautious outlook.

The index is currently at 94, signaling “extreme greed,” a level not seen since 2021. Some analysts warn that such overconfidence could precede short-term price corrections.

Nevertheless, MicroStrategy’s bold Bitcoin shopping strategy reflects its strong conviction in Bitcoin’s long-term value.