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MicroStrategy Increases Convertible Note Offering by 40% to $700M in Bitcoin Splurge

Jun 13, 2024
  • MicroStrategy raised its latest convertible note offering by $200 million from an original plan of $500 million.
  • It also offered initial buyers an option to purchase an additional $100 million of the notes.
  • Broker Bernstein set a $2,890 price target for the company’s shares.
As an analyst with a background in technology and finance, I believe MicroStrategy’s decision to increase its convertible note offering by $200 million and grant initial buyers an option to purchase an additional $100 million is a strategic move that positions the company to acquire more bitcoin. With the largest holding of bitcoin among publicly listed companies, MicroStrategy’s commitment to the crypto asset class is unwavering. The increased yield on the notes also makes them more attractive to institutional investors, which could lead to stronger demand and higher share prices.I’ve discovered that MicroStrategy, a software company listed on Nasdaq and the biggest corporate bitcoin (BTC) holder, has upped its convertible note offering by 40%, amounting to $700 million. The notes are priced with an annual yield of 2.25%.

In a recent press release, the company based in Tysons Corner, Virginia announced that it would offer unsecured, senior notes to institutional investors, with a maturity date in June 2032. The initial purchasers were also given an option to buy additional $100 million of notes within 13 days following the first issuance. The company aims to finalize this offering by Monday and intends to utilize the proceeds primarily for acquiring more bitcoin, as well as for general corporate purposes.

I, as an analyst, observed that the company’s shares gained approximately 2% during early trading on Friday. The shares were being traded slightly above $1,500. Yesterday, there was a significant decline of 7.5%. Notably, Bernstein, a brokerage firm, initiated coverage on Microstrategy today with a price target set at $2,890 and an outperform rating assigned.

In 2020, MicroStrategy became one of the earliest and most significant adopters of Bitcoin for its corporate treasury. Currently, the company proudly holds approximately 214,400 BTC, which translates to an impressive market value of around $14 billion. This makes MicroStrategy the largest publicly traded corporation with a substantial Bitcoin holding. The passionate voice behind this strategic decision is Michael Saylor, who serves as the executive chairman and is an unwavering advocate for Bitcoin.

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2024-06-14 17:59