MicroStrategy to Acquire Additional Bitcoin, Secures $500 Million in Funding

 

**KEY TAKEAWAYS**

- MicroStrategy plans to buy more bitcoin, funding the purchase through debt.

- The company is offering $500 million in convertible senior notes to institutional investors.

- MicroStrategy currently holds approximately $14 billion worth of bitcoin.

MicroStrategy (MSTR) intends to expand its bitcoin (BTC) holdings and is raising $500 million in debt to support this acquisition and other corporate purposes, as announced by the company on Thursday.

The debt offering involves convertible senior notes due in 2032, available to qualified institutional buyers (QIBs). Initial investors have a 13-day option to purchase up to an additional $75 million in notes. These unsecured senior notes will accrue interest semiannually, starting December 15, 2024, until maturity, unless they are repurchased, redeemed, or converted earlier.

**MicroStrategy's Bitcoin Bet**

MicroStrategy has gained notoriety for its bitcoin-centric strategy under the leadership of former CEO and current Executive Chairman Michael Saylor.

As of April 26, the company owned 214,400 bitcoins, valued at around $14 billion at current prices. Any bitcoin purchases in the second quarter would mark the 15th consecutive quarter of the company acquiring the cryptocurrency.

Other companies like Tesla (TSLA), Block (SQ), and Semler Scientific (SMLR) have also bought crypto, but none have amassed bitcoin holdings comparable to MicroStrategy's.

Furthermore, no other bitcoin-investing companies' stocks show as much correlation with bitcoin prices as MicroStrategy's. The price trends for bitcoin and MicroStrategy stock often move together, and since February, MicroStrategy stock has outperformed bitcoin. This surge coincides with the company's February 26 announcement of adding 3,000 bitcoins to its portfolio.

Year-to-date, bitcoin prices have risen about 50%, while MicroStrategy stock has more than doubled.

However, this correlation also has downsides. Over the past week, bitcoin prices have fallen roughly 6%, even after a brief recovery following the release of May's Consumer Price Index (CPI) data. MicroStrategy stock declined 9% during the same period.

Do you have a news tip for Investopedia reporters? Please email us at tips@investopedia.com

**SPONSORED**

**Trade on the Go. Anywhere, Anytime**

One of the world's largest crypto-asset exchanges is ready for you. Enjoy competitive fees and dedicated customer support while trading securely. Access Binance tools to easily view your trade history, manage auto-investments, view price charts, and make fee-free conversions. Create an account for free and join millions of traders and investors in the global crypto market.