MicroStrategy's Buys $5.4 Billion More in Bitcoin Using Convertible Notes and Equity Proceeds
Business intelligence firm MicroStrategy has again purchased Bitcoin, making it the third consecutive week of BTC acquisition. The company revealed in a filing to the Securities & Exchange Commission (SEC) on Monday that it acquired 55,500 BTC over the past week for a total of $5.4 billion.
Michael Saylor, Founder and Chairman MicroStrategy announces the latest Bitcoin purchases
On November 25, 2024, the company revealed updates on its 2029 Convertible Notes Offering, its At-The-Market (ATM) equity program, and its impressive Bitcoin holdings. Here's a breakdown of these game-changing developments:
2029 Convertible Notes Offering
MicroStrategy completed a private offering of 0% convertible senior notes due in 2029, raising an impressive $3.0 billion. This offering was upsized due to strong market demand, including a 55% conversion premium over the company’s stock price on November 19, 2024. After deducting associated costs, MicroStrategy secured approximately $2.97 billion in net proceeds.
The market's positive reception to this offering is a testament to MicroStrategy's strategic vision and the confidence investors have in its long-term growth strategy—one heavily tied to Bitcoin.
At-The-Market (ATM) Update
In addition to the convertible notes, MicroStrategy leveraged its ATM equity program to sell approximately 5.6 million shares of its Class A common stock between November 18 and November 24, 2024. This move generated a substantial $2.46 billion in net proceeds.
As of November 24, 2024, MicroStrategy still has $12.8 billion worth of shares available for future issuance under this program, ensuring a steady pipeline for additional capital generation if required.
Bitcoin Holdings Update
MicroStrategy deployed the proceeds from its convertible notes and ATM share sales to acquire 55,500 bitcoins for $5.4 billion, at an average price of $97,862 per bitcoin, including fees and expenses. This latest purchase underscores MicroStrategy's commitment to using its financial resources to accumulate Bitcoin as its primary reserve asset.
As of November 24, 2024, MicroStrategy and its subsidiaries now hold a staggering 386,700 bitcoins, acquired for approximately $21.9 billion at an average price of $56,761 per bitcoin. The company's total holdings represent a significant portion of the Bitcoin supply and highlight its leadership role in institutional Bitcoin adoption.
What This Means for Businesses
Darren Franceschini, co-founder of Fideum, highlighted how MicroStrategy's approach gives investors an opportunity to ride the bullish waves of Bitcoin's growth.
"By embracing Bitcoin at scale, the company is not just hedging against the future—it’s actively shaping it," Franceschini remarked.
Philipp Zentner, CEO of LI.FI, also weighed in, offering a perspective on the company’s strategic direction under Executive Chairman Michael Saylor. Zentner described the strategy as forward-looking and inherently positive for both the company and its investors.
"The strategy does not pose a significant risk to the broader market unless Saylor opts to liquidate his Bitcoin holdings," Zentner explained.
MicroStrategy’s actions set a powerful precedent for corporations considering Bitcoin as a treasury strategy. By leveraging financial instruments like convertible notes and equity sales, the company has not only diversified its capital-raising methods but also shown how to execute large-scale Bitcoin acquisitions strategically.
For businesses evaluating Bitcoin as part of their balance sheet strategy, MicroStrategy offers a compelling case study. Its bold approach demonstrates that Bitcoin can serve as both a treasury reserve and a long-term investment asset, potentially insulating companies from traditional market volatility and inflationary pressures.
MicroStrategy’s continued Bitcoin accumulation underscores its belief in the cryptocurrency as a cornerstone of its corporate strategy. With $386,700 bitcoins now under its belt and a clear roadmap for future capital raises, the company remains at the forefront of the Bitcoin revolution.
Businesses eyeing similar moves should take note: leveraging innovative financing methods and embracing Bitcoin could be the key to unlocking future growth and resilience in an increasingly digital economy.