MicroStrategy Can’t Get Enough Of Bitcoin; Ready to Bet $400 Million More
MicroStrategy has already invested in the largest digital asset three times, bringing its total investment to $475 million representing 40,824 BTC in total. But the company is not done and is planning to go another $400 million deeper into Bitcoin.
On Monday, MicroStrategy announced that it intends to issue $400 million of convertible senior notes due 2021 in a private offering to qualified institutional buyers that will mature in 2025.
The offering, which is subject to market and other conditions, will bear interest payable semi-annually in arrears on June 15 and December 15 of each year, from next year. The publicly-traded business intelligence company wrote,
“MicroStrategy 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.”
The decision to invest in Bitcoin (1st, 2nd, 3rd purchase) has already helped the company immensely; not only has their BTC investment has surged exponentially, thanks to an about 80% rise in the price of the digital asset, but the public market rewarded them with an increase in their share price to a level not seen since 2000.
[starting to sweat a bit over here] https://t.co/tMvarGQtJ9
— Barry Silbert (@BarrySilbert) December 7, 2020
The cryptocurrency market is excited about MicroStrategy doubling down on Bitcoin, but some are also seeing it as a “directional play with leverage.”
“If you don’t fantasize about flaunting it, floating in it, flying in it, frolicking with it, fortifying it, or fighting over it, you should probably play it safe and just buy Bitcoin.”
The Fed in March: "Let's print money to buy corporate bonds."
Microstrategy in December: "Let's issue corporate bonds and use that money to buy #bitcoin."
— Qiao Wang (@QwQiao) December 7, 2020
According to Jeff Dorman, the Chief Investment Officer at Arca, “Bitcoin may be the perfect corporate treasury asset.”
As we reported, companies are hoarding trillions of dollars in cash, which Dorman says is an inefficient way of using that capital. Dorman said,
“Right now, perhaps purchasing Bitcoin really is the best solution to this conundrum — Bitcoin increases transaction flexibility, keeps pace with inflation, keeps activist investors at bay, and provides a cushion should there be a during the next crisis.”