MicroStrategy raise $650 million in bond sale to fund next bitcoin purchase. On Friday, MicroStrategy (MSTR), announced that it raised $650 million worth of convertible bonds to fund more Bitcoin (BTC) purchases, underscoring CEO Michael Saylor’s conviction in the flagship digital asset.
The company confirmed Friday that it sold $650 million worth of convertible senior notes at a rate of 0.750% due in 2025. The interest rate is payable semi-annually on June 15 and December 15 beginning in 2021.
According to the press release “MicroStrategy intends to invest the net proceeds from the sale of the notes in bitcoin in accordance with its Treasury Reserve Policy pending identification of working capital needs and other general corporate purposes.”
The securities is sold pursuant to Rule 144A of the Securities Act of 1933 and would only be applicable to institutional investors. The increase was finalised just days after the company first revealed plans to use the proceeds of the bond to buy more bitcoin. Initially, MicroStrategy was planning to raise $400 million. At $650 million, the company will buy more than BTC 36,300 at current prices.
MicroStrategy shocked the world earlier this year when it announced that it would convert most of its balance sheet to Bitcoin. At the time, CEO Michael Saylor said his company was sitting on a “$500 million melting ice cube” of cash.
The company currently sits on 40,824 BTC representing over $734 million. That represents a gain of nearly $260 million from the basis acquisition price.
[image: Andre Francois McKenzie]