MicroStrategy, the largest corporate holder of Bitcoin, has announced plans to raise $1.75 billion through senior convertible notes at a 0% interest rate. The company intends to use these funds primarily to buy more Bitcoin, according to its Nov. 18 statement.
Key Features of the 0% Convertible Notes
MicroStrategy’s senior convertible notes come with several unique terms:
- No Regular Interest Payments: The 0% interest rate means bondholders will not receive regular interest payments.
- Maturity at Face Value: The notes are sold at a discount and will mature at full face value in 2029, unless converted earlier.
- Priority in Bankruptcy: These senior notes take precedence over common stock in the event of bankruptcy or liquidation.
At current Bitcoin prices, the company could acquire approximately 19,065 Bitcoin if the entire $1.75 billion is used for that purpose.
Bitcoin Accumulation Hits New Highs
MicroStrategy already holds 331,200 Bitcoin, worth over $30.3 billion, according to Bitcoin Treasuries data. On Nov. 18, the company added $4.6 billion worth of Bitcoin to its reserves.
So far in 2024, the firm has purchased 142,050 Bitcoin, valued at approximately $12.8 billion at current market prices. Since implementing its Bitcoin investment strategy, MicroStrategy is up 133%, with an average purchase price of $39,292 per Bitcoin.
Market Reaction and Future Plans
MicroStrategy’s stock (MSTR) surged nearly 13% to close at a record high of $374.80 on Nov. 18, though it dipped 0.7% in after-hours trading, according to Google Finance.
The company’s broader strategy, known as the “21/21 Plan,” aims to raise $42 billion over the next three years. This includes $21 billion in equity and $21 billion in fixed-income securities to fund additional Bitcoin purchases.
Bitcoin is currently trading at $91,653, just under 2% shy of its all-time high of $93,477 reached on Nov. 13, according to CoinGecko.
