MicroStrategy Boosts Stock Sale to $700M to Buy More Bitcoin

MicroStrategy, led by CEO Michael Saylor, has increased the size of its planned stock sale to raise additional funds to purchase Bitcoin. The company is now seeking to raise $700 million, up from the previously announced $500 million.

BREAKING: MicroStrategy increased its raise to $700 million to buy more #Bitcoin pic.twitter.com/B2I2uk98Ie

— Bitcoin Magazine (@BitcoinMagazine) June 14, 2024

MicroStrategy first announced plans on Thursday to raise $500 million by selling convertible senior notes to qualified institutional buyers. The proceeds would primarily go toward acquiring more Bitcoin for its corporate treasury, which already contains over 214,400 BTC worth $15 billion.

The software analytics firm then boosted the offering to $700 million on Friday. The company said the offering is expected to close on June 17th.

MicroStrategy has aggressively accumulated bitcoin since 2020 under Saylor’s direction. It utilizes debt to fund its Bitcoin buying, taking advantage of market volatility. The company cited its confidence that Bitcoin will continue appreciating over the long term.

By selling convertible senior notes, MicroStrategy gains flexibility. The notes pay interest and mature in 2032, but noteholders can convert into MicroStrategy stock before maturity.

This structure allows investors to benefit from potential Bitcoin price upside through the stock conversion option. It also shields note holders from downside risk due to their senior unsecured status.

MicroStrategy said it may use proceeds not allocated to Bitcoin purchases for general corporate purposes. However, its intent is clearly to expand its Bitcoin trove while prices remain depressed.

The additional capital injection signals MicroStrategy’s continued conviction in Bitcoin as its primary treasury reserve asset. Saylor is doubling down by acquiring more coins amid the current market turbulence.