Highlights:
- MicroStrategy plans to raise $1.75B through zero-interest convertible senior notes.
- The company has acquired 142,050 Bitcoin this year, totaling $12.8 billion in value.
- Peter Schiff mocks MicroStrategy’s Bitcoin strategy, forecasting a “bloodbath” for its stock.
Following a significant $4.6 billion Bitcoin (BTC) purchase, MicroStrategy, the largest corporate Bitcoin holder, is set to raise $1.75 billion through a private offering of zero-interest convertible senior notes that will mature on December 1, 2029. MicroStrategy’s founder and chairman, Michael Saylor, said they will use the net proceeds to acquire additional Bitcoin and for general corporate purposes. The offering will be available to institutional investors and select non-U.S. buyers.
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Convertible senior notes are debt securities that investors can convert into company stock or cash later. Investors can benefit from potential stock price growth while also receiving downside protection through fixed payments. However, the 0% senior convertible notes indicate that the business intelligence firm will not provide regular interest payments to bondholders. Additionally, the notes are “senior” to common stock, which gives holders priority in case of bankruptcy or liquidation.
MicroStrategy Announces Proposed Private Offering of $1.75B of Convertible Senior Notes. $MSTR https://t.co/dBJMUvfjj1
— Michael Saylor⚡️ (@saylor) November 18, 2024
Based in Tysons Corner, Virginia, the firm will offer initial purchasers an option to buy an additional $250 million in notes. This option will be available within three days of the initial issuance. Investors’ conversion rights will be restricted until June 2029, after which they will be fully convertible. The offering is being made under Rule 144A of the Securities Act of 1933 for qualified institutional buyers and Regulation S for non-U.S. transactions.
Moreover, Saylor also announced a webinar on November 19 to offer more details about the offering. The session, open to investors and stakeholders, will cover unanswered questions, including the specific terms of the private offering and future strategic plans.
MicroStrategy’s Recent Acquisitions
In his X post on November 18, Michael Saylor announced that the company acquired 51,780 Bitcoin, valued at $4.6 billion. The average price per Bitcoin was $88,627. This acquisition doubled the previous purchases, bringing the total Bitcoin expenditure to $16.5 billion. Just a week earlier, the company had invested more than $2 billion in additional BTC. These bold buying strategies have cemented MicroStrategy’s status as the world’s largest corporate Bitcoin holder.
MicroStrategy has acquired 51,780 BTC for ~$4.6 billion at ~$88,627 per #bitcoin and has achieved BTC Yield of 20.4% QTD and 41.8% YTD. As of 11/17/2024, we hodl 331,200 $BTC acquired for ~$16.5 billion at ~$49,874 per bitcoin. $MSTR https://t.co/SRRtRrB2jO
— Michael Saylor⚡️ (@saylor) November 18, 2024
As of November 17, MicroStrategy holds 331,200 BTC, making up 1.57% of the total Bitcoin supply. The firm has acquired 142,050 Bitcoin this year, valued at approximately $12.8 billion based on current prices.
MicroStrategy Stock Soars Record High on November 18
MicroStrategy (MSTR) shares rose 13% to a record high after the company revealed it had bought $4.6 billion in Bitcoin and planned to raise $1.75 billion for more. MicroStrategy’s stock has outpaced many S&P 500 stocks in year-to-date returns. Yahoo Finance data shows MSTR has surged over 500% in 2024, while Microsoft’s (MSFT) shares have risen about 11%.
Peter Schiff Mocks MicroStrategy’s Bitcoin Buying Spree
In October, MicroStrategy unveiled its plan to raise $42 billion over three years to acquire additional BTC. The “21/21 plan” includes $21 billion in fixed-income securities and $21 billion in equity.
Renowned economist Peter Schiff jokingly criticized the fast pace at which MicroStrategy is buying Bitcoin. Peter Schiff said if MicroStrategy continues at this pace, the entire plan could be completed in less than four months, and Michael Saylor would then need an even bigger plan.
It's been less than three weeks since @Saylor announced a three-year plan for $MSTR to spent $42 billion buying #Bitcoin. So far, $6.63 billion has already been spent. At this rate the entire plan will be completed in under four months. Then Saylor is gonna need a bigger plan.
— Peter Schiff (@PeterSchiff) November 18, 2024
Last month, he forecasted a ‘bloodbath’ for MicroStrategy’s stock, calling it the most overvalued on the MSCI World Index. He also raised concerns about the company’s skyrocketing market capitalization in comparison to gold mining companies.
$MSTR has got to be the most overvalued stock in the
MSCI World Index. When it finally crashes, that's gonna be the real bloodbath!— Peter Schiff (@PeterSchiff) October 22, 2024
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