MicroStrategy Plans to Buy More Bitcoin by Selling $500 Million in Convertible Notes

MicroStrategy Plans to Buy More Bitcoin by Selling $500 Million in Convertible Notes

MicroStrategy has announced the issuance of an additional $500 million stocks. The stocks are set to be sold to firm’s investors to raise funds for extending the company fund comprising of Bitcoins. The decision is indicative of the firm’s plan to double down on Bitcoin purchases as a treasury reserve.

$500 Million Stock Sale

The business intelligence firm has stated that it was planning to sell another installment of $500 million convertible senior notes. The investors will be able to redeem their investments in 2032.

The firm has retained that the notes are intended for qualified investors under the 144ARule in accordance with the Securities Act 1933. In this way, the investors are informed that their purchases are subjected to market factors and other stimuli.

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The firm has further notified the investors that notes are unsecured and bear a senior obligation. The payable interest for holders is to be issued on a semi-annual basis due on 15th June and 15th December for every year until redemption.

The maturity date of the notes is said to fall on 15th June 2032. In the event that the investors opt to repurchase, redeem, or exchange their holding prior to the deadline.

MicroStrategy is Planning to Expand Its Bitcoin Reserves

The business intelligence firm is known for maintaining one of the largest commercial and private Bitcoin reserves in the world.

The latest press release issued by the firm indicates that the fund raised from the sales of recently published senior notes will be directed towards purchasing another installment of Bitcoins that MicroStrategy will add to the company reserves. The firm has used the term general corporate purposes.

At the time, the crypto industry is undergoing some turbulence. However, MicroStrategy has shared its long-term plans to use Bitcoin as a treasury reserve asset class.

On the other hand, MicroStrategy is also working on issuing another $75 million in the form of aggregate principal notes.  These notes will be accessible to the investors who already have invested in the MS notes.

As per an official statement, if the firm is able to redeem less than the total outstanding notes then at least $75 million aggregate principal notes have to be outstanding and will not be qualified for redemption by the expected deadline.

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The press release revealed that the reference price of the notes that are used to drive the initial conversion price of notes is going to be combined US volume weighted average price equating MicroStrategy’s class A common stock for the duration of 9:30 to 4:00 EDT at the pricing date.

MicroStrategy to Facilitate Stock Investors

MicroStrategy has noticed in the press release that issued notes are available for sales to the accredited investors in accordance with the 144A Rule of the Securities Act of 1933.

It is important to note that investors may not purchase or sell convertible notes or class A common stock in public markets without completing specified legal requirements as per the MS press release. The legal restrictions and complexity of investment have led the firm to limit sales to only accredited investors.

Another firm dubbed as Asian MicroStrategy namely MetaPlanet officially declared their third consecutive Bitcoin purchase on 23rd April. The MetaPlanet shares have soared after each Bitcoin acquisition. A recent report revealed that the reserves of the firm now contain a total of 141 Bitcoins. CoinGecko indicates that the firm has amassed a 4.5% profit on its Bitcoin purchases thus far.

As of 9th April, the stock prices of MetaPlanet increased by 5 folds. The firm has now become the 30th biggest private commercial Bitcoin acquirer in the world. MetaPlanet unveiled its strategic plans to purchase the comprehensive capital market resources to boost its Bitcoin acquisition plan on 13th May.

The firm has also retained that it is using Bitcoin as a hedge against the national debt crisis and devaluation of the native legal tender.

Author: Isacco Genovesi

Isacco writes news articles, reviews and guides about cryptocurrencies including technical analysis, blockchain events, coin prices marketcap and detailed reviews on crypto exchanges and trading platforms.

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