MicroStrategy Inc (NASDAQ shares: MSTR) has decided to accumulate even more Bitcoin and intends to sell $ 400 million of senior secured securities in a private offering to institutional buyers.
The bonds will expire in 2028 and the credits will be guaranteed by the company and by "any bitcoin or other digital assets" that the company will acquire after the fundraiser closes. Investors, however, cannot claim the Bitcoins the company previously bought.
"The notes will be fully and unconditionally guaranteed on a senior secure basis, jointly and severally, by Microstrategy Services Corporation, a wholly owned subsidiary of Microstrategy, and certain subsidiaries of Microstrategy which may be incorporated or acquired after the close of the offering," he explains MicroStrategy.
The business analysis firm currently owns more than 92.000 Bitcoins, and the new purchase will bring the total count to more than 100.000 Bitcoins, based on current prices.
However, in a regulatory document released by the company last Monday, the company said it expects to post a loss of $ 284,5 million in its next earnings report due to Bitcoin's price volatility.
The company's move failed to impress traders as MicroStrategy shares fell more than 3% at close of trading on Monday. In addition, its $ 1 billion convertible note maturing in 2027 is also trading at a discount.
MicroStrategy sells data analytics software and services to businesses. But its core business has shown almost no growth in a decade: its revenue jumped to over $ 480 million last year from $ 455 million in 2010.
The course changed with the interest in bitcoins
However, its CEO's interest in Bitcoin has prompted the company's shares to soar very high. MicroStrategy first bought $ 250 million worth of Bitcoin last August and sold a total of $ 1,6 billion in convertible bonds last year for its Bitcoin purchases. The trend of adding Bitcoin to balance sheets has begun, which has prompted companies like Tesla and many other public companies to do the same.
Despite the recent Bitcoin price correction, MicroStrategy CEO Michael Saylor is optimistic about Bitcoin's future and still holds all Bitcoin.
Certainly if the predictions of some analysts were to turn out to be real and even some countries of the world were to start adopting bitcoin as their currency, then MicroStrategy would certainly be in an advantageous situation.
At that point, after creating eco-friendly "mining caverns", Tesla with its CEO Elon Musk, who has recently been rather opposed to the main digital currency, could join this trend. And what do you think of the upcoming MicroStrategy acquisitions? Are you also continuing to accumulate in dip?