Strategy, the business intelligence services and Bitcoin investment firm, is looking to raise $2 billion through 0% senior convertible notes to expand its Bitcoin holdings.
The initial note buyers have the chance to acquire an extra $300 million worth of notes beginning five days after issuance according to the February 18 statement. The company intends to allocate its net proceeds to buy more Bitcoin and maintain operational working capital.
Senior convertible notes function as debt instruments which offer future equity conversion rights to holders thus granting them senior status over common stock during bankruptcy proceedings or liquidation events.
The funding strategy supports MicroStrategy’s 21/21 Plan to acquire $42 billion worth of capital during the next three years for Bitcoin purchases. The company’s Bitcoin acquisition since the October 30 announcement reached 200,000 Bitcoins which now totals 478,740 Bitcoins making MicroStrategy the world’s largest corporate Bitcoin holder.
The proposed notes will mature on March 1, 2030 but the company retains the right to repurchase or redeem them before that date according to market conditions. The announcement resulted in a 1% decrease in MicroStrategy’s stock price but its shares have increased by 372% throughout the past year.
The company’s Q4 financial report showed a net loss of $670.8 million which indicated the market’s volatile nature.
Also Read: 12 U.S. States Have Indirect Investment of $330M in Bitcoin
