MicroStrategy completes $800 million convertible note offering to acquire more Bitcoin and for “general corporate purposes.”

MicroStrategy, one of the largest public holders of Bitcoin, has completed another significant convertible notes offering to acquire more Bitcoin. On June 20, the company announced the successful completion of its previously announced offering of 2.25% convertible senior notes due 2032.

Key Details of the Offering

- Amount Raised: The aggregate principal amount of the notes sold was $800 million, including $100 million issued under an option to purchase. Initial purchasers exercised this purchase agreement in full by June 17, with an additional purchase occurring on June 18.
- Net Proceeds: After deducting discounts, commissions, and estimated offering expenses, MicroStrategy raised approximately $786 million from the sale of the notes.

Bitcoin Acquisition

MicroStrategy used the proceeds from the notes offering to acquire an additional 11,931 BTC for $786 million, at an average price of $65,883 per BTC. As of June 20, MicroStrategy holds a total of 226,331 BTC, acquired for roughly $8.33 billion at an average price of $36,798 per BTC.

Strategic Bitcoin Accumulation

- Initial Purchase: MicroStrategy first entered the Bitcoin market in August 2020 with a $250 million BTC purchase.
- Primary Reserve Currency: Bitcoin has been MicroStrategy’s primary reserve currency since 2020.
- Regular Purchases: The company has regularly bought Bitcoin in batches, continuing its aggressive accumulation strategy.

Financial Performance

Despite its significant investments in Bitcoin, MicroStrategy reported a net loss of $53.1 million in Q1 2024. The company has not yet adopted the new digital asset fair value accounting standard, which would consider BTC price movements in market value.

Recent Fundraisers and Bitcoin Purchases

- March 2024 Offering: MicroStrategy completed a $604 million private convertible notes offering to purchase 9,245 BTC.
- Additional March Offering: Another $800 million convertible note offering was completed, adding 12,000 BTC to its treasury reserve.

CEO and Leadership

- Michael Saylor: MicroStrategy’s founder and former CEO, Michael Saylor, has been a strong advocate for Bitcoin. Under his leadership, the company has continuously raised funds through convertible notes to acquire more Bitcoin.

Conclusion

MicroStrategy's strategic accumulation of Bitcoin highlights its long-term commitment to the cryptocurrency as a reserve asset. Despite reporting financial losses, the company's continuous investment in Bitcoin demonstrates its belief in the digital asset's potential for future growth and stability. This latest notes offering and subsequent Bitcoin purchase reinforce MicroStrategy’s position as one of the largest holders of Bitcoin globally.