MicroStrategy raises $650M to be invested in bitcoin

Company announced debt offering last week

Published December 14, 2020 by Sydney Lake

Tysons-based business software company MicroStrategy Inc. announced Friday it closed a convertible debt offering by raising $650 million, which it plans to use to increase its bitcoin holdings.

MicroStrategy estimates the net proceeds from the notes sale will be approximately $634.9 million, which it will invest in bitcoin, according to a company statement. The initial conversion rate for the notes is 2.5126 shares of the company’s common stock per $1,000 principal amount of notes — or approximately $397.99 per share.

In August, the company had announced that it had converted $250 million from its cash holdings into more than 21,000 bitcoins, making it one of the first public companies to use cryptocurrency for cash holdings. The company announced in August it would keep its bitcoin holdings in its corporate treasury reserve — which MicroStrategy CEO Michael Saylor said in a statement would be the principal holding in its treasury reserve strategy. The company in September then announced it had purchased $425 million worth of bitcoin.

Every investor is in danger of losing their wealth due to the great monetary inflation. We all need a Store of Value that is not based on fiat. #Bitcoin is The Solution – an investment grade, safe haven, treasury reserve asset. #BTC is our best https://t.co/Rvf2JvyHMb.

— Michael Saylor (@michael_saylor) December 11, 2020

During the month of November, bitcoin rose to a new high, gaining 34%, according to reports, which led the asset to hit a $334 billion market value. The last time the market value was near that was nearly a year ago (Dec. 17, 2019), when it hit a $322.7 billion value, according to market reports. A single bitcoin is worth $19,190.50 as of Dec. 14.

MicroStrategy employs approximately 2,400 people and offers business data analytics software.

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