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MicroStrategy, the business intelligence firm led by co-founder Michael Saylor, has made headlines once again with a significant investment in Bitcoin. T
he company raised $1.01 billion through a private offering of convertible notes, boosting its aggressive Bitcoin acquisition strategy.
As a result, MicroStrategy purchased 7,420 bitcoins, bringing its total holdings to 252,220 BTC—worth around $15.8 billion at current market prices.
The Strategy Unfolds
On September 17, 2024, MicroStrategy announced plans to raise $700 million via convertible senior notes, a form of debt that can be converted into cash or shares. However, due to strong demand, the company exceeded this goal, raising over $1 billion. By September 19, they had purchased 7,420 bitcoins at an average price of $61,750 each, spending $458.2 million. This further strengthened Saylor’s long-term strategy of amassing Bitcoin, positioning the company as a major institutional holder.
Why Bitcoin?
While the financial gains are notable—MicroStrategy’s average acquisition price of $39,266 per bitcoin has led to nearly $6 billion in profit—the strategy goes beyond short-term profits. Saylor views Bitcoin as a hedge against inflation and currency devaluation, believing it to be the best store of value in the world today. His goal is to accumulate as much Bitcoin as possible for the company’s future.
Behind the Move
The convertible notes, with a low 0.625% interest rate, give investors the option to convert the debt into MicroStrategy shares at a premium of $183.19 per share, a 40% increase over the share price at the time of the announcement.
Not all of the $1.01 billion raised was used for Bitcoin purchases. A portion went towards redeeming $500 million in senior secured notes, freeing up 69,080 Bitcoins that had been used as collateral. The remaining funds strengthened the company’s Bitcoin reserves and helped manage its debt.
Market Reaction
Despite the large purchase, Bitcoin’s price remained steady, trading between $62,000 and $64,000. This limited market impact is partly due to the predictability of MicroStrategy’s Bitcoin buying strategy, which has already been factored into the market. However, the company now controls roughly 1.25% of all circulating Bitcoin, cementing its status as a significant player in the crypto space.
