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MicroStrategy is significantly outpacing some crypto-based hedge funds with its Bitcoin (BTC) portfolio since it unveiled its plans to pump its excess liquidity into several assets with a primary focus on Bitcoin.
The shares of American business intelligence, mobile software, and cloud-based services company MicroStrategy Incorporated (NASDAQ: MSTR) dropped in the pre-market today despite plans by the company to raise funds for more Bitcoin (BTC) purchase. According to a press release issued by the company, the announcement has been issued for a proposed private offering of $400 Million of Convertible Senior Notes.
Per the release, MicroStrategy’s $400 million aggregate principal amount of convertible senior notes intended to be issued will expire in 2025, and MicroStrategy will be liable to offer the early bird investors an opportunity to accrue up to an extra $60 million of the Convertible notes within a 13-day period from the date of the first issue of the first notes and this latter issuance will be based on the given market conditions at the time.
“The notes will be unsecured, senior obligations of MicroStrategy and will bear interest payable semi-annually in arrears on June 15 and December 15 of each year, beginning on June 15, 2021. The notes will mature on December 15, 2025, unless earlier repurchased, redeemed, or converted in accordance with their terms,” MicroStrategy revealed in the Press Release, adding that it “intends to invest the net proceeds from the sale of the notes in bitcoin in accordance with its Treasury Reserve Policy pending the identification of working capital needs and other general corporate purposes.”
Despite the apparently bullish disposition of MicroStrategy to shore up its Bitcoin reserves, the company’s latest move has not incited a corresponding growth in the company’s stocks as it fails to consolidate the 2.51% gains accrued at the close of trading on Monday. MicroStrategy’s stock is down by 1.33% to $331.74 in the pre-market and at the time of writing.
Bitcoin (BTC) Portfolio of MicroStrategy
For a business intelligence and software development company, MicroStrategy is significantly outpacing some crypto-based hedge funds with its Bitcoin (BTC) portfolio since it unveiled its plans to pump its excess liquidity into several assets with a primary focus on Bitcoin.
The investment model of MicroStrategy has been consistent as it has grown its Bitcoin reserves from 21,454 BTC back in August as reported by Coinspeaker to more than 40,000 BTC as revealed in its latest Bitcoin purchase earlier this month.
Justifying the firm’s decision to go bullish on Bitcoin, Michael Saylor, MicroStrategy’s CEO said in a statement:
“We have a large amount of USD on our balance sheet and we have carried that for a while. Over time, the yield on our dollar values has decreased and at points, we had an expectation that we would get higher real yields, and therefore, there was no real urgency to address this issue. But as of today, we’re expecting negative real returns or a negative real yield on US dollars, and that’s an expectation that has materially changed over the course of the last three months.”
Thus, more BTC investments are expected to be floated by the Virginia based firm in the coming months.