Leading business intelligence firm MicroStrategy has completed a $3 billion offering of 0% convertible senior notes due in December 2029. The company plans to use some or all of the proceeds to buy more Bitcoin. This move is part of MicroStrategy’s plan to raise $42 billion in the next three years under its 21/21 plan. The $3 billion debt offering followed MicroStrategy’s November 18th announcement to raise $1.75 billion, which was increased on November 20th to $2.6 billion.
The funds raised will expand MicroStrategy’s Bitcoin portfolio and support its general business operations. However, the offering comes with no registration under U.S. securities laws, limiting its availability to select buyers through private channels.
Corporate involvement in crypto boosts the sector and encourages private and public participation. MicroStrategy’s dogged belief in Bitcoin could attract more innovation into the industry, allowing for the integration of crypto with existing use cases, such as gambling. Already, crypto sports betting is becoming more popular as service providers and players realize that crypto is a trusted alternative payment method, reliable for instant deposits and withdrawals as well as attractive bonuses. The company’s decision to acquire more assets seems optimistic for the future of crypto.
MicroStrategy’s Bitcoin Acquisition Plans
MicroStrategy’s 21/21 plan seeks to raise $42 billion in the next three years to accumulate more BTC. The plan comprises $21 billion in fixed-income securities and $21 billion in equity. Data from Saylor Tracker, which tracks Bitcoin held by MicroStrategy, shows that the firm already has the most BTC held by any company, with 332.2K tokens worth over $32.7 billion. MicroStrategy could acquire nearly 30,270 BTC if the entire $3 billion goes to buying Bitcoin. This would further increase the company’s already significant Bitcoin holdings. Interestingly, MicroStrategy’s announcement of the completion states that holders of the notes can require the company to repurchase all or some of their notes by 2028, pending specific conditions.
The company’s Bitcoin acquisition plans have been met with interest from investors and analysts alike. Some have praised MicroStrategy’s bold move, while others have expressed concerns about the instability of Bitcoin. Despite the mixed reactions, MicroStrategy remains committed to its strategy.
MicroStrategy’s Shares Crash
MicroStrategy shares dropped over 25% from $536.7 to $397.28 on November 21st, despite a 5.3% recovery in after-hours trading. Nonetheless, MSTR was the second most-traded stock in the U.S. on November 20th and was up 480% YTD.
The stock crash came as Citron Research, a stock commentary service, disclosed that it hedged a short position on MSTR. According to the research firm, MSTR shares had become “overheated” and no longer aligned with Bitcoin fundamentals.
Despite the drop in share price, MicroStrategy remains committed to its Bitcoin acquisition plans. The commitment underscores a pro-Bitcoin legacy espoused by executive chairman and former CEO Michael Saylor, who has consistently expressed his confidence in Bitcoin’s long-term value. As the cryptocurrency market continues to evolve, the company’s strategy will likely remain a topic of interest for investors and analysts alike.
MicroStrategy’s commitment to Bitcoin has also led to changes in the company’s leadership structure. According to recent filings, Michael Saylor is no longer the majority shareholder of the company. This change is likely due to the significant amount of shares sold to raise funds for the company’s Bitcoin acquisition plans.
The impact of MicroStrategy’s Bitcoin acquisition plans on the cryptocurrency market remains to be seen. However, the company’s current strategy will ensure that it can favorably compete regarding ownership as the cryptocurrency sector’s popularity and adoption increase.
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