MicroStrategy to raise $500 million to buy more Bitcoins

Saylor’s Bitcoin strategy: MicroStrategy has announced its intention to raise capital for the second time in less than 10 days to increase its Bitcoin holdings through a convertible bond offering. 

The software firm disclosed its plan to offer $500 million in convertible notes due in 2031 to institutional investors, following a $600 million private offering in convertible notes on March 5th.

The move comes as Bitcoin surged to a record high, surpassing $73,000 on Thursday. MicroStrategy, based in Tysons, Virginia, has been actively investing in Bitcoin and has become one of the largest corporate holders of the cryptocurrency. It began acquiring and holding bitcoins in 2020, using revenue from its software business.

Convertible notes, offering the option to exchange them for shares when the stock reaches a predetermined level, provide companies with an avenue to raise capital at lower interest rates compared to regular bonds. This approach avoids immediate dilution of shareholders, as is the case with stock offerings.

MicroStrategy's strategic approach to investing in Bitcoin has garnered attention, with the company consistently accessing capital markets through convertible offerings and stock offerings, primarily for the purpose of expanding its cryptocurrency holdings. The firm's shares have seen a strong surge, rising 1.8 per cent in premarket trading after reaching a 24-year high on Wednesday, and have nearly tripled in value since the beginning of 2024.

(With Reuters inputs)