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Today, the enterprise software maker announced yet another $600 million convertible note issuance for investors and institutions to buy Bitcoin. The move comes a month after MicroStrategy raised $650 million in a separate convertible note offering to purchase BTC.
The news pushed the price of Bitcoin to a new high of $50,085 in a temporary pump, which retraced to the $49,650 level at press time.
As per the announcement, the notes will be unsecured, senior obligations of MicroStrategy and will bear interest payable semi-annually in arrears on February 15 and August 15 of each year, beginning on August 15, 2021. The notes will mature on February 15, 2027, unless earlier repurchased, redeemed, or converted in accordance with their terms.
MicroStrategy intends to hold on the Bitcoin until 2022. “Subject to certain conditions, on or after February 20, 2024, MicroStrategy may redeem for cash all or a portion of the notes,” the announcement read.
It added that the firm additionally expected to grant to the initial purchasers of the notes an “option to purchase, within a 13-day period beginning on, and including, the date on which the notes are first issued, up to an additional $90 million aggregate principal amount of the notes.”
“MicroStrategy intends to use the net proceeds from the sale of the notes to acquire additional bitcoins, the announcement said.”
Only qualified institutional buyers pursuant to Rule 144A under the Securities Act will be offered to buy the convertible notes. This is similar to the earlier convertible note offering that MicroStrategy closed in 2020.
The firm already sits on over 70,000 of Bitcoin, worth over $3.5 billion at press time. The coffers will further grow as MicroStrategy purchases even more BTC, which in turn, would attract other institutional and traditional firms to invest some of their own money into the asset.
As the proponents always say: The institutions are coming.