Dec 08, 2020
Leading business intelligence firm MicroStrategy plans to buy even more Bitcoin (BTC) by selling $ 400 million in debt securities.
On Monday, MicroStrategy Inc (MSTR) said it plans to raise nearly $ 400 million with the sale of senior convertible notes. Then, the net income from the sale will invested in Bitcoin after making way for business expenses. In the press release, the followings said:
“Microstrategy intends to invest the net proceeds from the sale of the notes in bitcoin in accordance with its Treasury Reserve.”
Only “qualified institutional buyers” will be allowed to buy interest-bearing securities that mature within five years. The notes will be unsecured. Starting from June 15, 2021, between June 15 and December 15, interest payments every six months will be MicroStrategy’s top-level obligations. The notes will mature on December 15, 2025, unless they were previously bought back, redeemed, or converted under their terms. MicroStrategy may redeem all or part of the notes to cash on or after 20 December 2023, subject to certain conditions.
The statement published right after MicroStrategy‘s announcement that it purchased 2,574 BTC last week. The firm currently holds 40,824 BTC, more than any other publicly-traded company. MicroStrategy started holding 38,250 BTC a few months ago as a reserve asset. The Nasdaq listed company began to make its first Bitcoin investment in August. It was $ 250 million. One month after, in September, the firm bought another $ 175 million BTC. Last week the firm added 2,574 BTC to its reserves. The company purchased the newest BTCs at an average price of $ 19,400. And now, MicroStrategy plans to buy more Bitcoin (BTC).
The reason behind the firm’s purchase is that Michael Saylor sees Bitcoin and other alternative investments as a way to avoid inflation. The company expressed the opinion that holding large amounts of dollars was not reasonable, stating that the US dollar was getting weaker day by day. Therefore, it would make sense to shift treasury assets to deflationary or less inflationary assets. Current forecasts show that the market will strengthen further with the firm’s bitcoin purchase. If the leading crypto money continues to be accepted by investors in this way, the price can reach very high levels. At the time of writing, BTC is trading at $ 18,825. So, this shows that the Bitcoin reserve held by MicroStrategy for the moment is almost $ 768,512.
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