Microstrategy plans $700M offering for debt buyback and BTC purchase

Microstrategy, a U.S.-based business intelligence firm, announced plans for a $700 million private offering of convertible senior notes, aiming to raise capital for debt repayment and to acquire more Bitcoin (CRYPTO:BTC).

The offering, targeted at institutional investors, is expected to mature in 2028, depending on market conditions.

According to Microstrategy’s announcement, the proceeds from this private offering will be used to redeem $500 million in senior secured notes, which carry a 6.125% interest rate and are set for redemption on September 26, 2024.

If the offering is successful, any remaining funds will be used to increase the company’s Bitcoin holdings.

The senior secured notes are currently backed by 69,080 Bitcoins, which will be released upon repayment.

Microstrategy continues to reaffirm its strategy of leveraging Bitcoin as a key treasury reserve asset, actively expanding its Bitcoin portfolio.

Recently, the company acquired an additional 18,300 Bitcoins for $1.11 billion, bringing its total holdings to 244,800 BTC, currently valued at $14.15 billion.

This portfolio has seen a 50% gain, driven by both strategic fixed-interval purchasing and Bitcoin’s price appreciation.

Despite a 4.91% decline in Microstrategy’s stock (MSTR) on Monday, it has seen a 9.37% increase over the past week.

This mixed performance reflects investor sentiment around the company’s aggressive Bitcoin strategy combined with its efforts to reduce debt.

Microstrategy’s approach of balancing debt reduction with Bitcoin accumulation continues to be a key aspect of its financial strategy.

The company holds more Bitcoin than any other publicly traded entity, apart from Bitcoin-focused exchange-traded funds (ETFs) like BlackRock’s IBIT and Grayscale’s GBTC.

At the time of reporting, the Bitcoin (BTC) price was $57,808.89.