MicroStrategy Completes Sale of $650 Million in Bonds to Fund Next Bitcoin Purchase

The sale of bonds reinforces MicroStrategy’s conviction that Bitcoin is an investment opportunity of this generation.

MicroStrategy (MSTR), a leading business intelligence company, announced on Friday that it raised $650 million in convertible bonds to fund more Bitcoin (BTC) purchases, reinforcing CEO Michael Saylor’s belief in the key digital asset.

The company confirmed on Friday that it sold $650 million in senior convertible notes at a rate of 0.750% maturing in 2025. The interest rate is paid semi-annually on June 15 and December 15, starting in 2021.

According to the press release:

„MicroStrategy intends to invest the net proceeds from the sale of the notes in Bitcoin Blueprint in accordance with its Treasury Reserve Policy, pending the identification of working capital needs and other general corporate purposes.

The securities were issued under Rule 144A of the Securities Act of 1933 and will be available to institutional investors only.

The increase was finalized a few days after the company announced its plans to leverage the bond resources to acquire more Bitcoin. As the Cointelegraph previously reported, MicroStrategy initially aimed for a $400 million increase. For $650 million, the company can purchase over 36,300 BTC at current prices.

MicroStrategy shocked the world earlier this year when it announced it would convert most of its balance sheet to Bitcoin. At the time, CEO Michael Saylor said his company was sitting on a „$500 million melting ice cube“ of money.

The company currently operates 40,824 BTC, representing more than $734 million. This represents a gain of almost $260 million from the basic purchase price.

Wall Street analysts are concerned that MicroStrategy has become overexposed to Bitcoin, whose decade of volatility kept many institutional investors on the sidelines until very recently. Citbank recently downgraded MSTR to „sell“ from „neutral“ because of its „disproportionate“ BTC focus.

MicroStrategy may be the largest holder of corporate Bitcoins, but it is not alone. On Thursday, Massachusetts-based insurer MassMutual announced that it has purchased $100 million in BTC for its general investment account, making it one of the largest corporate holders. Publicly traded companies such as Galaxy Digital (GLXY), Square (SQ) and Hut 8 Mining Corp (Hut-8) invested between US$36 million and US$134 million in Bitcoin. Each company now has significant profits.