Digital Assets: Bitcoin Hits +$50K; MicroStrategy Readies $600M Investment

February 16, 2021 | Digital Assets, Latest News, News
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MicroStrategy is scaling up its bets on bitcoin. It will sell $600 million of notes to invest in the crypto.

MicroStrategy (NASDAQ: MSTR), the listed business information company that has already accumulated 71,079 bitcoin since August 2020, is planning another binge buy of the leading cryptocurrency. This morning CEO Michael Saylor tweeted his intentions of buying bitcoin worth $600 million by issuing convertible notes to fund the investment. (Bitcoin.com)

MicroStrategy convertible senior notes

  • Principal amount $600 million
  • Due 2027
  • Private sale to QIBs
  • Option to purchase an additional $90 million of the notes
  • Unsecured
  • Interest payable semi-annually in arrears on February 15 and August 15 of each year, beginning on August 15, 2021.
  • All or a portion of the notes redeemable on or after February 20, 2024
  • Notes convertible into cash, or class A common stock, or combination thereof

The interest rate, conversion rate, conversion price, and certain other terms of the notes will be determined at the time of pricing of the offering.

The company said it will use the net proceeds to acquire additional bitcoins.

December raise

MicroStrategy’s move is a replay of its raise of $650 million in capital in mid-December to buy more bitcoin.

On December 7th, MicroStrategy’s announcement offered:

  • $400M of unsecured convertible senior notes
  • Due in 2025
  • With an option for investors to buy an extra $60M of notes within 13 days of the offering

On December 9th, MicroStrategy officially priced their offering at:

  • $550M of unsecured convertible senior notes
  • Due in 2025, with a semi-annual interest payment at 0.75% APY
  • With an option for investors to buy an extra $100M of notes within 13 days of the offering

On December 11th, MicroStrategy closed the round and wrapped up the extra $100 million option too.

The current proposed sale could also end up being oversubscribed.

Bitcoin’s new ATH

This morning bitcoin scaled a new all-time-high (ATH) of $50,584.85, breaking through the important, psychological resistance of $50,000.

As this is being written, it is trading at $48,535.92, down 0.58% over 24 hours.

At the same time, MicroStrategy is quoting $981.13, down over 5%.

Related Story:    MicroStrategy Borrowing $400M To Bump Up Bitcoin Bet                                            

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