By
Bhushan Akolkar
April 19th, 2024
Soon after completing the $500 million bond sale, MicroStrategy is willing to raise another $1 billion with the public sale of its Class A common stock and using those proceeds to buy Bitcoin.
Business intelligence firm MicroStrategy is aggressively taking its Bitcoin acquisition strategy further. On Monday, June 14, MicroStrategy said that it has successfully completed the $500 million corporate bond sale. The secured corporate notes bear an annual interest rate of 6.125% and will mature in 2028.
After deducting some initial purchaser discounts and commissions, the net proceeds from the sale will be $488 million. The company noted that it intends to use the net proceeds in additional Bitcoin purchases. MicroStrategy CEO Michael Saylor has been an ardent proponent of Bitcoin (BTC).
Over the last ten months, the company has acquired over 92,000 BTC with a net investment of over $2.25 billion. Bitcoin is showing signs of recovery after major volatility over the last week, The cryptocurrency has surged past its crucial resistance of $40,000 and is targeting higher levels as of now.
However, MicroStrategy is willing to take its aggressive BTC purchase strategy even further. In a few hours of announcing this $500 million bond sale, the cloud software company submitted another $1 billion proposals to the U.S. SEC.
MicroStrategy $1 Billion Worth Common Stock Sale
On Monday, the cloud software company filed paperwork with the US Securities and Exchange Commission (SEC) for the public sale of its Class A Common Stock via an Open Market Sale Agreement. Such a kind of open-market agreement allows the firm to sell stocks from time to time based on the company requirement.
MicroStrategy Launches “At the Market” Securities Offering for Flexibility to Sell Up to $1 billion of its Class A Common Stock Over Time $MSTRhttps://t.co/qouK8pFmBF
— Michael Saylor⚡️ (@saylor) June 14, 2021
The filing submitted to the SEC also mentions MicroStrategy’s intentions to buy BTC from the proceeds of the sale. The filing notes:
“We intend to use the net proceeds from the sale of any class A common stock offered under this prospectus for general corporate purposes, including the acquisition of bitcoin”.
Some of the market analysts have called out Microstrategy for risking investors’ money with aggressive BTC purchases. Clarifying on this matter, the firm writes:
“The concentration of our bitcoin holdings enhances the risks inherent in our bitcoin acquisition strategy. Servicing our debt will require a significant amount of cash, and we may not have sufficient cash flow from our business to pay our indebtedness.”
“Our bitcoin holdings are less liquid than our existing cash and cash equivalents and may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents,” it adds further.
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