By
Steve Muchoki
April 19th, 2024
The senior convertible notes offerings from MicroStrategy come off as a short to medium-term investment offering as the maturity of the notes is slated for December 15, 2025, with the first payout billed for June 15, 2021.
The push from business intelligence and mobile software development company MicroStrategy Incorporated (NASDAQ: MSTR) to bolster its Bitcoin (BTC) reserves through the issuance of its Senior Convertible Notes offerings has gotten even a bigger boost. According to a Coindesk report, the MicroStrategy Senior Convertible Notes offerings which have attracted about $550 million through investors who purchased the notes have also seen an additional $100 million purchase.
The new purchase as reported now puts the total amount of funding raised through the MicroStrategy issued offerings to $650 million further reinforcing the amount of capital available to the company to increase their current Bitcoin stakes.
According to an earlier report by Coinspeaker, MicroStrategy initially planned to issue $400 million of Convertible Senior Notes. However, on Wednesday, the company raised the bar. It now sought a target to sell $550 million of the debt instruments in a private offering to qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”).
Interest in the company’s offerings actually soared beyond expectations as the initial $400 million from the convertible notes offerings were surpassed and the investors exercised the full option to boost the purchases by the extra $100 million that the company says it will now invest in Bitcoin.
MicroStrategy Bitcoin Senior Notes Offerings and the Public Perception
The senior convertible notes offerings from MicroStrategy come off as a short to medium-term investment offering as the maturity of the notes is slated for December 15, 2025, with the first payout billed for June 15, 2021.
As for the pricing, the initial conversion rate for the notes was fixed at 2.5126 shares of MicroStrategy class A common stock per $1,000 principal amount of notes. This is equivalent to an initial conversion price of $397.99 per share. With the new boost in the offerings, this initial arrangement may see a slight modification subject to the current value of the company’s stocks.
Today, the total Bitcoin reserve held by the Virginia based firm is 40,824 BTC. This was revealed by the company’s Chief Executive Officer Michael Saylor after the company’s latest purchase of 2,574 BTC priced at approximately $19,427 each for $50 million.
While many see the potentials in MicroStrategy’s moves, Citibank’s analyst Tyler Radke thinks otherwise, citing the company’s disproportionate focus on Bitcoin. The analyst thus downgraded the company’s stock from Neutral to Sell, sending the shares down. The stocks are still reeling in the aftermath of the downgrade as it closed trading on Friday with a 1.52% dip to $285.92.