MicroStrategy will raise $500 million to buy more bitcoin

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The American company MicroStrategy reported today, Thursday, June 13, that it will raise funds for around $500 million to continue purchasing bitcoin (BTC).

The company run by Michael Saylor plans to raise this capital through a private offering of convertible senior notes maturing in 2032. The bonds will be sold to qualified institutional investors. These bonds are a type of fixed income financial asset that will offer investors periodic interest (semi-annual in the case of MicroStrategy) and that, in turn, guarantee the return of capital at maturity. Another characteristic is its convertibility, that is, these assets allow the holder of the bond to exchange it for company shares. In addition, the “senior” rating gives them priority for payment by the company over other debts in the event of liquidation or bankruptcy. In this way, this financial tool allows companies to raise capital from the issuance of debt, thus obtaining the possibility of investing that amount achieved. Regarding the usefulness that will be given to the money collected, the institution express that will continue the strategy of accumulating bitcoin.

“MicroStrategy intends to use the net proceeds from the sale of the notes to purchase additional bitcoin and for general corporate purposes.” MicroStrategy, company dedicated to the development of business technology.

This resource to raise funds and allocate them to the accumulation of more bitcoin was already recently used by the American entity. On March 19, 2024, Saylor communicated the purchase of 9,245 BTC worth approximately $623 million that entered the coffers of their company thanks to this same proposal to issue convertible bonds. Regarding this upcoming acquisition of bitcoin by MicroStrategy, digital ecosystem analyst Juan Rodríguez referred to it in X. The Colombian BTC specialist anticipated that Saylor's company will get new 7,000 bitcoin and also left a question mark for the market. Rodríguez questioned whether the American firm will be able to acquire the next bitcoin below the price of $70,000 or, on the contrary, the market will anticipate and raise the price due to growth in demand.

MicroStrategy's bitcoin buying strategy

MicroStrategy, founded in 1989 by Michael Saylor and Sanju Bansal, is a company dedicated to the development of technology and business intelligence. Create software to facilitate data processing and storage.

From 2020 It initiated the adoption of bitcoin as its main reserve asset and refuge against inflation. From that moment to the present, it was a promoter of the digital currency, thus becoming the listed company that has the largest amount of bitcoin in its treasury. This can be seen in the following BitcoinTreasuries chart. Currently, he has 240,400 bitcoin, which is equivalent to around $7.542 million. Additionally, it has a market capitalization of almost $29 billion.

The publicly traded companies with the largest amount of bitcoin. Source: BitcoinTreasuries.

The strategy used is DCA (Dollar Cost Averaging). This implies the gradual purchase of an asset, in order to average a good price for its purchase. Thus, the average price at which MicroStrategy accessed the digital currency is around $35,000, while bitcoin is trading at approximately $67,500 at the time of this writing. These data are seen more clearly in the graph provided by the TheBlockData analysis platform.

Average BTC purchase price since 2020 by MicroStrategy. Source: TheBlockData Other relevant information about MicroStrategy is what happened on May 15, 2024. As reported by BitcoinDynamic, on that date the company began trading within one of the largest stock indices in the world: MSCI World.

Thanks to the adoption of BTC as its main assetSaylor's company grew to such a point that it was added to this financial instrument established in 1970 and brings together the 1,600 largest corporations on the planet.