MicroStrategy Raises Private Offering Cap To $2.6 Billion To Buy More Bitcoin

MicroStrategy, the business intelligence firm with a huge appetite for Bitcoin, has made notable adjustments in its $1.75 billion notes offering.

In a post on X, Michael Saylor, the Executive Chairman of MicroStrategy, explained that the company has decided to increase its offering of convertible bonds. The move will support the firm’s increase in Bitcoin holdings.

What Influenced MicroStrategy’s Increased Offering?

According to the post, MicroStrategy has increased its initial convertible bonds offering from $1.75 billion to $2.6 billion.

– Advertisement –

Initially, MicroStrategy planned to issue $1.75 billion worth of the bonds.

However, given recent events in the Bitcoin space, this has triggered investors’ demand. So, relying on market provisions, the offer has increased to $2.6 billion, including a $400 million “greenshoe option.”

This greenshoe option allows for additional bond sales if demand exceeds the original amount offered. MicroStrategy’s goal is to make additional purchases of the world’s leading digital asset.

– Advertisement –

This development comes as the company prepares to sell convertible senior notes to investors. The notes are due in five years’ time, in 2029.

As per MicroStrategy’s Press Release, the notes will be sold only to qualified institutional buyers via private offerings. Sales of the offered notes will close on November 21, 2024. The notes, which will mature on December 1, 2029, will not bear regular interest, nor will the principal amount accumulate.

Experts say the move aligns with Michael Saylor’s strategy of aggressively leveraging low-interest debt to accumulate Bitcoin.

They maintain that the company’s approach of issuing bonds at a 0% interest rate and high conversion premium reduces financial risk. This method favors MicroStrategy’s long-term Bitcoin plans.

The Numbers Behind MicroStrategy’s Bitcoin Bet

MicroStrategy’s Executive chairman has maintained a laser-like focus on Bitcoin over the past four years since it started accumulating BTC.

Saylor recently stated MicroStrategy is in an exclusive relationship with Bitcoin and intends to hold the asset indefinitely. As of the last figures, MicroStrategy’s cumulative holding of Bitcoin amounts to 331,200 BTC.

At the current market price of $94,300 per BTC, this is approximately $31.23 billion. The latest purchase of 51,780 BTC pushed the value to such a staggering level.

Interestingly, the average purchase price of the last buy is $88,627 per BTC. Thus, at the current price, MicroStrategy has profited approximately $293.7 million on the last buyup.

This profit taking and the bullish confidence in Bitcoin’s continued price increase have fueled MicroStrategy’s aggressive accumulation move.

So far, the company controls about 1.6% of Bitcoin’s total circulating supply and looks set to add more.

Institutional Interest in Bitcoin Gains Momentum

MicroStrategy’s success story with Bitcoin has influenced a Japanese investment firm to follow the same trajectory.

Like MicroStrategy, Tokyo-based Metaplanet has steadily increased its Bitcoin holdings. Although the firm started its accumulation journey in May 2024, its total holdings now stand at over 1,000 BTC.

The poor-performing Japanese Yen largely influenced Metaplanet’s decision to embrace Bitcoin. The firm considered using Bitcoin as a hedge against the declining fiat currency and focused on BTC as a long-term asset.

Market watchers believe that with the growing institutional interest in Bitcoin and exposure through exchange-traded funds (ETFs), more firms might adopt MicroStrategy’s approach. They think that Metaplanet is one of many more to come.