MicroStrategy, Raising Cash to Buy More Bitcoin, Boosts Notes Offering to $550M

MicroStrategy anticipates raising $537 million in net proceeds from a debt sale designed to fund bitcoin speculation.

AccessTimeIconDec 9, 2020 at 2:44 p.m. UTC
Updated Sep 14, 2021 at 10:40 a.m. UTC

MicroStrategy said Wednesday it anticipates raising $537.2 million in net proceeds from a debt offering the business intelligence company is conducting in its most brazen play yet to buy more bitcoin.

  • The company announced its unsecured, convertible senior notes will pay out 0.750% in interest annually to qualified institutional buyers – investors with at least $100 million under management – who buy in.
  • MicroStrategy plans on selling $550 million of the debt instruments. That's a significant markup from the $400 million targeted in the original Monday announcement.
  • MicroStrategy's bitcoin-first treasury reserve policy, which saw the 31-year old company plunk $475 million of excess cash in the cryptocurrency, has pushed Nasdaq-listed MSTR shares higher for weeks. But MSTR investors seem less certain in the wisdom of raising debt to buy more bitcoin.
  • Tuesday, Citi analyst Tyler Radke downgraded MSTR to "sell." He argued in a research note that CEO Michael Saylor's laser-like focus on bitcoin was distracting the company from executing its business model.
  • The new debt target of $550 million stands in stark contrast to Radke's rebuke.

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Investing in the Future of the Digital Economy
October 18-19 | Spring Studio, NYC