MicroStrategy completes a $3 billion convertible notes offering to fund Bitcoin purchases, boosting its holdings to over 331,200 BTC and cementing its position as the largest corporate Bitcoin treasury.
MicroStrategy, the software firm turned Bitcoin investment vehicle, has successfully completed a $3 billion convertible senior notes offering, part of its ambitious plan to raise $42 billion for Bitcoin acquisitions over the next three years. The offering, finalized on Thursday, marks the company's largest debt raise to date.
MicroStrategy raises $3 billion at 0% interest to buy more #Bitcoin, with an implied strike price of ~$672 per share.$MSTR bets big again. pic.twitter.com/1SrvedN9Ld
— TFTC (@TFTC21) November 21, 2024
Initially announced as a $1.75 billion offering, strong investor demand prompted MicroStrategy to increase the size to $2.6 billion, with an additional $400 million available for initial purchasers. The notes carry a 0% interest rate and mature in December 2029, offering investors a 55% premium with a conversion price of approximately $672 per share. These terms reflect confidence in MicroStrategy’s growth and its Bitcoin-focused strategy.
The company plans to use the proceeds to purchase Bitcoin, adding to its already substantial holdings of 331,200 BTC, valued at over $30 billion at current prices. This acquisition strategy aligns with MicroStrategy's “21/21” plan, which aims to raise $21 billion through equity and $21 billion through fixed-income securities for Bitcoin investment.
Despite the successful offering, MicroStrategy’s stock (MSTR) faced a significant drop of 25% on Nov. 21, closing at $397.28 after peaking at $536.7 earlier in the week. Investment firm Citron Research disclosed a short position on MSTR, citing concerns that the stock’s valuation had become “detached from Bitcoin fundamentals.”
However, MSTR remains a top performer in 2024, with shares up 480% year-to-date, far outpacing Bitcoin’s 110% gain over the same period. The stock was the second most-traded asset in the U.S. on Nov. 20, contributing to a record-setting $70 billion trading volume for Bitcoin-related equities and ETFs.
MicroStrategy’s Executive Chairman, Michael Saylor, has championed Bitcoin as a superior store of value compared to traditional currencies, a belief that has driven the company’s aggressive acquisition strategy. Since its first Bitcoin purchase in 2020, MicroStrategy has become the largest corporate holder of Bitcoin.
Saylor’s vision includes not only amassing Bitcoin but also offering investors exposure to the asset through a combination of equity and fixed-income securities. “Our treasury strategy is designed to provide investors varying degrees of economic exposure to Bitcoin,” the company stated, positioning itself as “the world's first and largest Bitcoin Treasury Company.”
MicroStrategy’s latest raise comes as Bitcoin approaches the $100,000 milestone, with current prices around $98,400. Bitcoin has surged on the back of growing institutional adoption and the promise of more favorable U.S. regulatory policies under President-elect Donald Trump.
