MicroStrategy is a business-intelligence firm that has established the trend of commercial investments in Bitcoin. The firm continued its Bitcoin purchase policy for the better part of the crypto winter.
As a result, the firm reported massive profits following the ongoing Bitcoin ATH. At the same time, the move also made a positive impact on MicroStrategy share prices.
Cointelegraph has reported that MicroStrategy intends to continue to purchase Bitcoin. On this account, the firm has sold an additional $604 million convertible notes offerings. The firm is reportedly one of the biggest Bitcoin holders and used the proceeds from its recent sales to purchase more Bitcoin.
Former CEO Michael Saylor has noted that the firm completed its previous round a 0.875% on 1st March that is due payment on 2031.
As per the announcement, these notes are to be sold to qualified institutional buyers that are in compliance with the Securities laws of the United States. The $603.74 million sales were followed by $800 million convertible notes sales on 8th March to generate proceeds for purchasing 12K Bitcoins to the Treasury Reserves.
Saylor noted that the acquisition of additional 9 thousand BTCs took place through convertible notes and excess cash.
MicroStrategy Continues to Buy Bitcoin
MicroStrategy’s Bitcoin reserves are now in profits as per the latest statements from the former CEO. The firm noted that the average per Bitcoin cost was $35,160 per unit. The firm holds around 214,246 Bitcoin in reserves that account for 1.02% of the total Bitcoin supply.
The firm organized the second fundraiser in March with a target to raise $600 million. Senior convertible notes are debt securities that are changed to equity later.
If not repurchased, converted, or redeemed these notes have a deadline of maturity on 15th March, 2031. The senior convertible notes are not like common shares because holders have priority in the event of bankruptcy or liquidation.
Saylor is one of the biggest Bitcoiners who has continued to advocate for Bitcoin purchases among institutional investors. The former CEO reiterated last month that he does not have any plans to sell Bitcoin.
He further stated that his firm has plans to keep buying the top forever and noted that Bitcoin was an exit strategy. The blog post regarding the sales of convertible notes on MicroStrategy’s official website noted that the notes are unsecured and bear interest at 0.875% per annum.
Additionally, the conversion rate for notes is set initially at 0.4297 shares of MS’s class A common stock per $1000 principal amount with a 40% premium over composite volume of the same till 14th March.
MicroStrategy to Sell Convertible Notes for Bitcoin Purchases
MicroStrategy article indicates that the net proceeds from sales of convertible notes is approx. $592.3 million following deduction of commissions, estimated offering expenses, and initial purchase discounts. The note offering and sales and MS’s class A common stocks are not regulated as per the Securities Act or Securities Laws of other jurisdictions.
On legal grounds, such convertible notes and shares are not to be offered or sold in the United States without registration or acquiring a registration exemption from the relevant regulator.
The firm declared that the press release published on the official website of MS should not be treated as a sales offering or solicitation of offer to buy convertible notes in any state or jurisdiction in which such an offering would be unlawful under securities laws.
Bitcoin Network Development
For context, it is important to note that MicroStrategy is a public traded firm that has worked continuously on Bitcoin network development. At the conclusion of the press release, MS declared that the firm has utilized debt financing and equity proceeds to accumulate Bitcoin.
The firm also quoted risk management strategies mentioned in the Annual Report in a 10-K filing with SEC on 15th February 2024 for the benefit of investors.
