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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.
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.
STORY CONTINUES BELOW
- 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.
Read more: Michael Saylor: Bitcoin's Cyber Hornet
Kevin Reynolds
Kevin Reynolds was the editor-in-chief at CoinDesk. Prior to joining the company in mid-2020, Reynolds spent 23 years at Bloomberg, where he won two CEO awards for moving the needle for the entire company and established himself as one of the world's leading experts in real-time financial news. In addition to having done almost every job in the newsroom, Reynolds built, scaled and ran products for every asset class, including First Word, a 250-person global news/analysis service for professional clients, as well as Bloomberg's Speed Desk and the training program that all Bloomberg News hires worldwide are required to take. He also turned around several other operations, including the company's flash headlines desk and was instrumental in the turnaround of Bloomberg's BGOV unit. He shares a patent for a content management system he helped design, is a Certified Scrum Master, and a veteran of the U.S. Marine Corps. He owns bitcoin, ether, polygon and solana.
