Microstrategy, a Nasdaq-listed firm for business intelligence, is increasing its focus on and its cryptocurrency bet. The Virginia-based company borrowed $600 million to purchase more Bitcoin .
The notes will be secured, senior Obligations of MicroStrategy and will bear interest semi-annually, starting on August 15, 2021. The company stated in a statement that the notes will expire on February 15, 2027 unless they are repurchased, redeemed, or converted in accordance to their terms.
Michael Saylor, a crypto bull and business intelligence giant, has previously sold debts in excess of $550 million to buy Bitcoin.
MicroStrategy is well-placed to do so again. MicroStrategy’s Bitcoin investment has made the publicly-traded company’s shares rise by 580 percent. Bitcoin’s price rose from $11,000 to today, after it made its first cryptocurrency purchase through Coinbase’s institutional service.
Microstrategy has 72,000 bitcoins worth more than $3.6 Billion at the current price. The company purchased an aggregate of 70.470 bitcoins in 2020 at a cost of $1.1 Billion. This is well below current levels.
MicroStrategy’s market capital is $9.15 billion, as of Tuesday. This means that the company invests nearly 40% of its net worth in Bitcoin.
MicroStrategy CEO Saylor was believed to have convinced Elon Musk that $1.5 billion of Tesla’s funds should be converted to bitcoin. Although there was a big celebration after Tesla’s purchase and acceptance of Bitcoin as a payment method, it wasn’t the first large firm that converted a portion of its cash to bitcoin.
In the second half 2020, a wave institutional investors began to embrace Bitcoin. Payment startup, Square, and other Wall Street whales like Microstrategy, adopted the policy to place their cash surpluses in crypto.