Business intelligence firm MicroStrategy continues its Bitcoin (BTC) purchase after raising $1.01 billion 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, which puts BTC’s price within the $63,000 price range.
MicroStrategy Add 7420 BTC to Reserve
MicroStrategy Chairman Michael Saylor announced earlier today that the firm acquired an additional 7,420 BTC for approximately $458.2 million, or about $61,750 per coin.
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.
