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MicroStrategy raises $650M Convertible Bond to fund in Bitcoin

MicroStrategy raises $650M Convertible Bond to fund in Bitcoin

MicroStrategy, a famous business intelligence firm, declared that it has raised worth $650 million of convertible bonds to fund additional Bitcoin (BTC) acquisitions. On Friday, the company confirmed that it had sold $650 million worth of convertible notes at a rate of 0.750%. Its due date falls in 2025. The interest rate is transferred semi-annually on June 15 and December 15, commencing from 2021.

MicroStrategy issued the securities under Rule 144A of the Securities Act of 1993. Moreover, it will be accessible only for institutional investors. Further, the company declined to reveal the names of the participants in the purchase. Moreover, it elucidates that the notes were sold in a private offering to adequate institutional buyers. The holders of these notes may need MicroStrategy to repurchase them in the event of a fundamental change. And the repurchase price would be equivalent to 100% of the highest amount of the notes. In addition, the sale’s net profits will be about $635 million after subtracting the original purchaser’s discounts and commissions.

MicroStrategy can purchase approximately 36,300 Bitcoin at $650M

The raise settled just days after the company first expressed its desire to leverage bond proceeds to buy bitcoin. MicroStrategy initially targeted a raise of $400 million. Further, with a $650 million raise, the firm can buy over 36,300 bitcoin at current prices. The recent move follows MicroStrategy’s $50 million purchase of bitcoin. It currently holds above 40,000 BTC. Hence, MicroStrategy will fund the amount in Bitcoin in accordance with its treasury reserve policy and is pending testimony of corporate purpose and capital needs.

MicroStrategy and CEO Michael Saylor are now prominent names in the crypto trading world. MicroStrategy may be the most comprehensive corporate Bitcoin holder, although it isn’t the only one. Recently, U.S. based insurance firm MassMutual declared it had bought $100 million in BTC for its general investment account. Hence, making it one of the biggest corporate holders. The purchase was completed by a New York-based fund management company called NYDIG. MassMutual also received a $5 million minority equity stake in NYDIG. 

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