MicroStrategy (MSTR), a prominent software firm listed on Nasdaq and renowned for holding substantial amounts of bitcoin (BTC) in its treasury, has increased its convertible note offering by 40% to $700 million. This decision follows a recent surge in its bitcoin acquisitions, marking a strategic move to bolster its cryptocurrency holdings.

The convertible notes, offered exclusively to institutional investors through a private offering, feature an annual yield of 2.25% and will mature in June 2032. These notes are characterized as unsecured, senior obligations, providing flexibility in investment terms. Additionally, MicroStrategy has granted initial purchasers an option to acquire an additional $100 million in notes within 13 days from the initial issuance date. The company anticipates closing the offering by Monday.

Proceeds from the issuance are earmarked primarily for expanding MicroStrategy's bitcoin reserves and supporting general corporate operations. This move underscores MicroStrategy's commitment to leveraging bitcoin as a key component of its treasury strategy, a practice initiated in 2020.

Following the announcement, MicroStrategy's shares experienced a modest increase of nearly 2% in early Friday trading, trading just above $1,500 per share. This uptick follows a previous day's decline of 7.5%. In a separate development, Bernstein, a brokerage firm, initiated coverage of MicroStrategy with an outperform rating and set a price target of $2,890 per share, citing strong growth prospects.

MicroStrategy's accumulation of bitcoin began in 2020 and has since amassed 214,400 BTC, valued at approximately $14 billion, making it the largest publicly traded holder of bitcoin. The company's executive chairman, Michael Saylor, has been a vocal advocate for bitcoin, emphasizing its potential as a store of value and investment asset.

The expansion of MicroStrategy's convertible note offering reflects its confidence in bitcoin's long-term value proposition and its ongoing commitment to strategic investments in the digital asset space.