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MicroStrategy to Buy $500 Million Worth of Bitcoin…Could Buy More with $1 Billion Stock Offering

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MicroStrategy to Buy $500 Million Worth of Bitcoin…Could Buy More with $1 Billion Stock Offering

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MicroStrategy, led by Michael Saylor, one of Bitcoin’s most renowned supporters, has completed another senior secured notes offering to buy more BTC.

In an announcement released on June 14th, 2021, MicroStrategy announced that it has completed the issuance of $500 million senior secured notes. The notes were due in 2028 and the money gotten is used to buy more bitcoins. The company currently owns approximately 92,079 bitcoins.

These notes were sold to qualified institutional buyers in a private offering under Rule 144A of the Securities Act of 1933.

What’s interesting, however, is that the company has also announced a newly formed subsidiary, MicroStrategy LLC. This new subsidiary now owns all of the bitcoins.

Shortly thereafter, the business intelligence firm announced that it plans to sell its Class A common stock. The stock will be sold for up to $1 billion. They added that some of the proceeds could be used to buy more bitcoins.

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Another Big Bitcoin Buy?

In a document filed with the SEC on Monday (June 14, 2021), MicroStrategy stated that it will launch a product. This product will enable the company to sell its Class A common stock at a market price of up to $1billion over time. According to the S-3 form document, the proceeds from the sale can be used for various purposes. These could include buying more bitcoins.

The document extract is as follows:

“We intend to use the net proceeds from the sale of any class A common stock offered under this prospectus for general corporate purposes, including the acquisition of bitcoin, unless otherwise indicated in the applicable prospectus supplement. We have not determined the amount of net proceeds to be used specifically for any particular purpose.”

Bitcoin All The Way for MicroStrategy

MicroStrategy CEO Michael Saylor is a well-known Bitcoin supporter. In early June, he announced that he had begun acquiring BTC in June 2020.

At the same time, MicroStrategy bought Bitcoin for the first time in August last year. They have been expanding their BTC portfolio ever since. According to documents from the US Securities and Exchange Commission, the company said it would not conduct Bitcoin transactions. The company will rather hold the asset for a long time.

“We view our bitcoin holdings as long-term holdings, and we do not plan to engage in regular trading of bitcoin and have not hedged or otherwise entered into derivative contracts with respect to our bitcoin holdings, though we may sell bitcoin in future periods as needed to generate cash for treasury management and other general corporate purposes.”

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  2. Pingback: Michael Saylor: Bitcoin is Outperforming Gold as an Inflation Hedge | LightBlocks Cryptocurrency and Blockchain News

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