MicroStrategy to Raise $1.75B From Non-Interest Senior Convertible Notes to Buy More Bitcoin

MicroStrategy, the largest corporate holder of Bitcoin, is set to raise $1.75 billion to buy more Bitcoin from senior convertible notes at a 0% interest rate.

MicroStrategy is set to raise $1.75 billion from senior convertible notes at a 0% interest rate, which it intends to use to acquire more Bitcoin.

The business intelligence firm announced the offering in a Nov. 18 statement, adding that it will “use the net proceeds from this offering to acquire additional bitcoin and for general corporate purposes.”

The 0% senior convertible note means that MicroStrategy will not be paying regular interest to bondholders.

Instead, the convertibles are sold at a discount and will mature to face value if they are not converted prior to the maturity date — which is 2029 in MicroStrategy’s case.

They are also “senior” to common stock in the sense that holders have priority in the event of bankruptcy or liquidation.

MicroStrategy could buy another 19,065 Bitcoin at current prices if it were to spend the entire $1.75 billion on BTC.

Bitcoin Treasuries data shows that MicroStrategy currently holds 331,200 Bitcoin, which is worth over $30.3 billion, following its purchase of another $4.6 billion worth of Bitcoin on Nov. 18.

In total, MicroStrategy has purchased 142,050 Bitcoin this year alone, valued at around $12.8 billion at current prices.

Michael Saylor's firm is now up 133% on its Bitcoin investment strategy, having bought its Bitcoin at an average purchase price of $39,292.

MicroStrategy's purchase (green) and Bitcoin's price movements (blue) since September 2020. Source: Saylor Tracker

MicroStrategy (MSTR) shares increased nearly 13% to set a new closing high of $374.8 on Nov. 18 but fell 0.7% in after-hours, according to Google Finance data.

Related: OCC notice suggests impending launch for spot Bitcoin ETF options trading

Last month, MicroStrategy unveiled its plan to raise $42 billion over the next three years to stack more Bitcoin as part of its “21/21” plan, consisting of $21 billion in equity and $21 billion in fixed-income securities.

Bitcoin is currently trading at $91,653 — less than 2% away from its all-time high of $93,477 reached on Nov. 13, according to CoinGecko.