On December 7, the firm announced plans to issue convertible senior notes worth $400 million, a debt security that can be exchanged into the stock of the issuing company. The declaration stated: “Microstrategy intends to invest the net proceeds from the sale of the notes in Bitcoin.”
At current rates, the $400 million will raise the company’s holdings by 20,833, bringing the company’s overall crypto stash to almost 62,000 BTC. Microstrategy will pay half-yearly interest to the holders of the notes until December 2025. The company also reserves the right to redeem cash notes from December 20, 2023.
The announcement states that within 13 days of starting the offering, MicroStrategy could sell up to an additional $60 million worth of notes to its early buyers. The securities will be issued under Rule 144 of the Securities Act, and will be available to qualified institutional investors only. Gabor Gurbacs, CEO of New York-based investment firm VanEck, indicated in response to MicroStrategy’s announcement that the bid is more representative of a digital asset fund than a publicly traded corporation.
During August, when the company announced it had accepted Bitcoin as its primary reserve asset after buying 21,454 BTC for $250 million, MicroStrategy made headlines in the crypto community. The next month, it then bought a further 16,796 BTC for $175 million. The transactions were made via the OTC and brokerage platform of Coinbase.