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.

Dec 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.
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