MicroStrategy Prepares for $1 Billion Bitcoin Buy After Debt Issue

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In Brief
  • MicroStrategy closed its offering of convertible senior notes, selling $1.05 billion of the bonds.

  • The company previously announced an expected sale of $600 million of debt.

  • MicroStrategy has used every opportunity to acquire Bitcoin since its first purchase last year.

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Virginia-based business intelligence firm MicroStrategy said it had closed its offering of 0% convertible senior notes, CEO Michael Saylor announced in a tweet.



MicroStrategy sold $1.05 billion worth of convertible senior notes, which will mature in February 2027. This also included the option for accredited investors to purchase $150 million aggregate principal amount of notes. MicroStrategy will retain the option to redeem them for cash, shares of MicroStrategy common stock, or a combination of the two.

MicroStrategy announced the offering earlier this week. At that point the company had expected the sale of $600 million in convertible senior notes. A convertible senior note is a low-risk bond that an issuer must pay before its debts if it goes bankrupt. Investors can exchange them for shares of the issuer’s common stock.

MicroStrategy estimated that the net proceeds from the sale of the notes would be approximately $1.03 billion. It intends to use these net proceeds to purchase more Bitcoin (BTC). 

Spreading the Good Word

MicroStrategy is a business analytics company that provides “software solutions and expert services that empower every individual with actionable intelligence.” However, since a growing proportion of its portfolio is represented by crypto, its stock has been trading more like one.

Earlier this month, MicroStrategy held its user annual conference, called MicroStrategy World 2021. This year’s event was dubbed “Bitcoin for Corporations.” The purpose of the conference was to help attendees become familiar with the template they had used in adopting bitcoin. Another theme explored was the possibility of bitcoin’s use as a primary reserve asset. 

Strategy: Acquire and Hodl

MicroStrategy has acquired BTC voraciously over this year past year, since making its first acquisition last summer. 

In December, it announced a similar private offering for $400 million. The total amount sold ended up being $650 million, or $150 more than expected. At the beginning of February it purchased an additional $10 million in BTC. 

This strategy has paid off well for the business analytics company, adding over $8 billion to its market value, according to Bloomberg.

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Nick is a data scientist who teaches economics and communication in Budapest, Hungary, where he received a BA in Political Science and Economics and an MSc in Business Analytics from CEU. He is a relative latecomer to the field of cryptocurrency and blockchain technology, but is intrigued by its potential economic and political usage. He can best be described as an optimistic center-left skeptic.

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