Michael Saylor is at it yet again, this time issuing debt to buy more bitcoin. Yesterday, he announced via Twitter that MicroStrategy had closed an offering of US$500 million in senior secured notes due in 2028 at an annual rate of 6.125%.
In the formal press release, some interesting information emerged:
- MicroStrategy’s existing approximately 92,079 bitcoins are being held by a newly formed subsidiary, MacroStrategy LLC
- The notes are fully and unconditionally guaranteed by MicroStrategy Services Corporation and certain subsidiaries (existing and formed in the future), and secured by all assets within such entities, including bitcoin acquired on or after closing
- The notes however would not be secured by any existing bitcoin or bitcoin acquired from the proceeds of any sale of existing bitcoin
MicroStrategy May Sell $1 Billion in Stock to Buy More Bitcoin
In addition to the announcement above, MicroStrategy filed paperwork for the proposed sale of up to $1 billion in class A common stock, essentially giving the company the ability to sell stock, from time to time, as it deems fit.
According to the filing with the Securities and Exchange Commision (SEC):
We intend to use the net proceeds from the sale of any class A common stock offered under this prospectus for general corporate purposes, including the acquisition of bitcoin.
While it is not clear how much of the proceeds would be used to purchase more bitcoin, it would be surprising if Saylor deviated from the “convert corporate treasury into bitcoin” strategy that has been in place since last year.
Is the Bet Paying Off?
So far, with the Bitcoin price hovering at around US$40,000, it would appear as if it has:
As Dan Held has said, for a company called MicroStrategy, this strategy may well be one of the best macro strategies yet.
Who Else Has Been Buying Bitcoin?
If you’re interested in following the latest developments in this space, be sure to check out our Crypto Institutional Purchases List 2021 which we regularly update when new announcements are made.
Join in the conversation on this article’s Twitter thread.
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