MicroStrategy, the world’s largest publicly traded business intelligence firm, has planned to invest the proceeds from a $400 million securities offering into Bitcoin (BTC).
It has been reported that the firm revealed plans to issue $400 million in convertible senior notes, debt security that can be converted into the issuing company’s shares.
The report stated:
“Microstrategy intends to invest the net proceeds from the sale of the notes in Bitcoin.”
However, at current prices, the $400 million would increase the company’s holdings by 20,833, which would bring the firm’s total crypto stash to almost 62,000 BTC.
Microstrategy will pay semi-annual interest to the note-holders until December 2025, as the firm also reserves the right to redeem the notes for cash from December 20, 2023.
The announcement also states that MicroStrategy may also offer up to an additional $60 million worth of notes to its initial purchasers within 13 days of commencing the offering.
MicroStrategy is issuing $400 million worth of debt securities with plans to expand its Bitcoin holdings with the proceeds. https://t.co/wB8UlZHCih — Cointelegraph (@Cointelegraph) December 8, 2020
Likewise, the securities will be issued under Rule 144 of the Securities Act and will be available to qualify institutional investors only.
Gabor Gurbacs, the CEO of New York-based investment firm VanEck, suggested that the offering is more indicative of a digital asset fund than a publicly listed company.
MicroStrategy Announces Proposed Private Offering of $400 Million of Convertible Senior Noteshttps://t.co/KvZNIbO6Fa — Michael Saylor (@michael_saylor) December 7, 2020
MicroStrategy made waves in the crypto world during August when the firm revealed it had adopted Bitcoin as its primary reserve asset after purchasing 21,454 BTC for $250 million.
Thus, it then purchased a further 16,796 BTC for $175 million the following month. The purchases were made through Coinbase’s OTC and brokerage platform.