MicroStrategy to Boost Bitcoin Holdings After $875M Notes Sale

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MicroStrategy Inc. (NASDAQ: MSTR), a major long-term Bitcoin (BTC) investor, has announced the pricing of its convertible senior notes due in 2028. While the company had announced plans to raise $700 million, the firm has since raised the target to $875 million and an additional $135 million, which is meant for the initial purchasers. 

MicroStrategy’s Bitcoin Strategy

The company expects to close the offering by Thursday, September 19, 2024. Net proceeds are projected at approximately $864.1 million, or up to $997.4 million if initial buyers opt for the extra purchase.

“MicroStrategy intends to use the net proceeds from the offering to redeem all $500.0 million outstanding aggregate principal amount of MicroStrategy’s 6.125 percent Senior Secured Notes due 2028 and to use any balance of the net proceeds to acquire additional bitcoin and for general corporate purposes,”

Earlier this week, MicroStrategy announced a redemption notice to the Convertible Senior Notes for about $523.8 million. 

Additionally, the company said that it had acquired 18,300 BTCs, for $1.11 billion, between August 6 and September 12. As a result, MicroStrategy holds a total of 244.8k Bitcoins, worth more than $14 billion.

MicroStrategy’s Role in the Bitcoin Market

Over the years, MicroStrategy has cemented its position as a key long-term investor in Bitcoin, boosting confidence in the digital asset sector. Interestingly, central banks such as those of Norway and Switzerland hold significant shares in MicroStrategy, with 1.123 million and 466,000 shares, respectively.

As the global economy braces for potential changes, especially with the anticipated Federal Reserve rate cuts, Bitcoin’s price is expected to surge, potentially mirroring gold’s historic breakout.

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With MicroStrategy’s bold bets and the anticipation of a Fed rate cut, the stage is set for a potential Bitcoin price surge. What’s your gut feel?