MicroStrategy Continues Bitcoin (BTC) Purchase after Raising $1.01B from an Upsized Convertible Notes Offering

The latest BTC purchase demonstrates the firm's continued commitment to the Bitcoin network. It also comes amid an ongoing market rally

Business intelligence firm MicroStrategy has added 7,420 BTC to its holdings, valued at $458.2 million at the time of purchase. This latest acquisition brings MicroStrategy’s total BTC holdings to 252,220 BTC, now worth around $9.9 billion.

The firm also announced the completion of a $1.01 billion upsized convertible note offering, which will be used to fund future BTC purchases. The notes carry an interest rate of 0.625% per annum and will mature on September 15, 2028.

Bitcoin’s price continues to rally amid the market uptrend, now trading above $63,000 and showing signs of further gains.

Business intelligence firm MicroStrategy continues its Bitcoin (BTC) purchasing spree after raising $1.01 billion from an upsized Convertible Notes Offering. The latest BTC purchase also demonstrates the firm’s continued commitment to the Bitcoin network. It also comes amid an ongoing market rally, which puts BTC’s price within the $63,000 price range.

MicroStrategy Adds 7420 BTC to Reserve

Earlier today, MicroStrategy Chairman Michael Saylor announced that the firm has acquired an additional 7,420 BTC for approximately $458.2 million, or about $61,750 per coin. This latest acquisition follows a previous purchase of 4,800 BTC in August.

The latest transaction has pushed MicroStrategy to achieve a BTC Yield of 5.1% during this quarter and 17.8% since the start of the year. The “BTC Yield,” a new concept developed by MicroStrategy, measures the percentage change in the company’s Bitcoin holdings against the available shares.

This concept gives shareholders precise data on how the value of the company’s Bitcoin assets changes with their interest in the capital. It has also become an important part of the company’s strategy for growing its Bitcoin reserve and protecting it from inflationary risks.

As of September 19, 2024, MicroStrategy possesses 252,220 BTC worth about $9.9 billion, acquired at approximately $39,266 per coin. The 7,420 BTC acquisition follows a series of previous acquisitions. The company began accumulating Bitcoin in 2020 and still considers the digital asset a core component of its treasury.

The Upsized Convertible Note Offering

Michael Saylor’s MicroStrategy has consistently funded its Bitcoin purchases through various methods, including debt issuance. The latest Bitcoin acquisition came after Saylor announced the completion of a $1.01 billion convertible note offering.

The note offering includes $135 million from an option the initial purchasers exercised. This demonstrates strong demand in the private market, where the notes were sold to qualified institutional buyers.

The notes bear interest at 0.625% per annum, payable semi-annually in arrears on March 15 and September 15 of each year beginning March 15, 2025. They will mature on September 15, 2028, unless the company decides to redeem or convert them earlier.

MicroStrategy can convert the notes into cash, MicroStrategy Class A common stock shares, or a mix of cash and shares. This move can, however, be decided upon at MicroStrategy’s election. Intriguingly, MicroStrategy can redeem the notes for cash starting December 20, 2027, if MSTR’s stock price reaches at least 130% of the conversion price.

Bitcoin Price Reaction

On Wednesday, Bitcoin and the broader crypto market staged a bullish rally after the US Federal Reserve announced a 50 basis point rate cut. Following the announcement, Bitcoin quickly crossed over $62,000 and is now trading at over $63,000.

As of this writing, BTC’s price is $63,002, up by 1.2% in the past day and 7.7% over the past week. The trading volume, however, registered a 24-hour decline of $24% to $39 billion. Despite this decline, market analysts and participants predict more uptrends for the world’s leading cryptocurrency.

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