MicroStrategy convertible bonds: MicroStrategy, a software firm, has announced its second convertible bond offering in less than 10 days, aiming to bolster its exposure to the surging bitcoin market. The company revealed a $500 million offering of convertible notes due in 2031 to institutional investors, following a $600 million private offering on March 5. This move comes as MicroStrategy's shares experienced an 8 per cent decline on Thursday after reaching a 24-year high in the previous session, reflecting the stock's remarkable threefold surge in 2024. Concurrently, bitcoin hit a new peak at $73,803, marking a nearly 70 per cent increase year-to-date.

Amid a trend of companies issuing convertible bonds in a high-interest-rate environment, MicroStrategy's strategic move underscores its commitment to investing in bitcoin. The company's consistent offerings and investments in bitcoin since late 2020 demonstrate its proactive approach to leveraging favourable market conditions.

Convertible notes provide companies with the flexibility to raise capital at lower interest rates than regular bonds without the immediate dilution of shareholder value that stock offerings entail. MicroStrategy, which began acquiring and holding bitcoins in 2020, now holds 205,000 bitcoins, making it the largest corporate holder of the cryptocurrency. This strategy has been particularly relevant as revenue from its software business softened in 2022 and 2023.

MicroStrategy's continued investment in bitcoin, highlighted by its latest convertible bond offering, indicates a steadfast belief in the long-term potential of the cryptocurrency despite market volatility.

(With Reuters inputs)