MicroStrategy, led by Michael Saylor, has recently purchased an additional 9,245 Bitcoins for $623 million, expanding its total Bitcoin holdings to 214,246. With an average purchase price of $35,160 per Bitcoin, MicroStrategy has cumulatively invested $7.5 billion in Bitcoin. This significant investment positions MicroStrategy’s Bitcoin assets at over 1% of the total Bitcoin market, indicating an unrealized profit of approximately $6 billion.
The funding for this substantial acquisition was obtained from two primary sources: $592.3 million was raised through the company’s latest convertible debt offering, while the remaining $30.7 million was sourced from surplus cash reserves. However, despite this strategic move and the completion of a $603.7 million convertible debt offering, MicroStrategy’s stock experienced a 13% decline on Tuesday, paralleling a decrease in Bitcoin’s value. This transaction closely follows another convertible debt offering of $800 million completed just the week before.
MicroStrategy has outlined a unique repayment plan for its borrowed funds, with the intention to repay the debt before September 15, 2030. The company plans to offer investors the option to exchange the borrowed cash for MicroStrategy shares, subject to specific conditions and rules. Initially, for every $1,000 lent, investors will receive 0.43 MicroStrategy shares, providing an alternative to receiving cash repayment.