MicroStrategy, led by CEO Michael Saylor, has increased the size of its planned stock sale to raise additional funds to buy Bitcoin. The company is now seeking to Raised $700 millionup from the previously announced amount of $500 million.
BREAKING: MicroStrategy has increased its fundraising to $700 million to buy more #Bitcoin pic.twitter.com/B2I2uk98Ie
— Bitcoin Magazine (@BitcoinMagazine) June 14, 2024
MicroStrategy first announced plans Thursday to raise $500 million by selling convertible securities to qualified institutional buyers. The proceeds will primarily go toward getting more Bitcoin for the company's treasury, which already contains more than 214,400 Bitcoin worth $15 billion.
The software analytics company then boosted the bid to $700 million on Friday. The company said the offering is expected to close on June 17.
MicroStrategy has been aggressively accumulating Bitcoin since 2020 under Saylor's leadership. It uses debt to finance the purchase of Bitcoin, taking advantage of market fluctuations. The company indicated its confidence that Bitcoin will continue to rise in the long term.
By selling convertible securities, MicroStrategy gains flexibility. The bonds pay interest and mature in 2032, but noteholders can convert them into MicroStrategy shares before maturity.
This structure allows investors to benefit from the potential rise in the price of Bitcoin through a stock conversion option. It also protects note holders from downside risks due to their unsecured position.
MicroStrategy said it may use proceeds not allocated to purchasing Bitcoin for general corporate purposes. However, it is clear that its intention is to expand its Bitcoin stock while prices remain low.
The additional capital infusion signals MicroStrategy's continued conviction in Bitcoin as an essential treasury reserve asset. Saylor is doubling down on his efforts by acquiring more coins amid the current market turmoil.