Michael Saylor’s Strategy To Raise Another $2 Billion To Buy More Bitcoin – Grayscale Bitcoin Mini Trust (BTC) Common units of fractional undivided beneficial interest (ARCA:BTC)

Michael Saylor‘s Strategy MSTR, the largest corporate Bitcoin holder in the world, intends to issue $2 billion in convertible debt through a private offering, to buy more Bitcoin BTC/USD

What Happened: On Tuesday, the company announced plans to offer the notes to institutional investors through a private placement, including an additional $300 million option for early buyers. The notes, set to mature on March 1, 2030, will be convertible into cash, stock, or a combination of both at Strategy’s discretion.

The notes will neither accrue regular interest nor increase in value, meaning their principal amount will stay constant over time. Strategy reserves the right to redeem the notes for cash beginning March 5, 2027, but only if its stock price remains at least 130% above the conversion price for a designated period.

Investors have the right to request a repurchase on March 1, 2028, or in the case of a significant corporate change, at the principal amount along with any accrued special or additional interest.

The firm, led by Saylor, stated that the proceeds would mainly be used to acquire more Bitcoin, with a portion set aside for working capital.

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Why It Matters: The initiative is part of the company’s larger 21/21 Plan aiming to accumulate $42 billion in Bitcoin on its balance sheet by 2027. This is the company’s first simple convertible offering since it secured over $560 million at a substantial discount.

This decision also comes after a week wherein the company refrained from raising funds through share sales or debt to purchase Bitcoin, a strategy it had frequently employed in the past.

Strategy’s ambitious Bitcoin investment plan, therefore, could be seen as a move to capitalize on the increasing acceptance of Bitcoin as a legitimate institutional asset. However, Saylor opined that institutional investors are yet to allocate sufficient capital to Bitcoin, despite its growing acceptance as a financial asset.

He also noted that recent regulations are simplifying the process for companies to include Bitcoin in their balance sheets. For instance, the Financial Accounting Standards Board’s fair value accounting rules mandate that companies report cryptocurrencies at their fair market value.

Strategy’s bold move comes in the wake of a 20% reduction in workforce and over a 14% drop in the company’s stock value since last month. The company, which held 478,740 Bitcoin as of Feb. 17, has seen its stock surge over 370% during the past year.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.