MicroStrategy Stock Plunges After Announcing Issue Of $600 Million In Convertible Senior Notes To Buy More Bitcoin

Updated: 05 March 2024

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MicroStrategy shares plunged after it announced a plan to raise $600 million via an issue of convertible senior notes, in part to purchase more Bitcoin.

The company’s stock price slumped about 8% in the past 24 hours to trade at $1,174 as of 12.25 p.m. EST. It’s still up 66% so far this year and 368% over the past year

The business intelligence firm is the largest corporate holder of Bitcoin with a stash of 193,000 BTC worth around $13 billion at the current prices. But it’s not done buying.

It said in a statement that it “intends to use the net proceeds from the sale of the notes to acquire additional Bitcoin and for general corporate purposes.”

Bitcoin briefly hit a new all-time high today of $69,325 before plummeting back to $64,264.

MicroStrategy Announces Proposed Private Offering of $600 Million of Convertible Senior Notes $MSTR https://t.co/PEN5dxesIb

— Michael Saylor⚡️ (@saylor) March 4, 2024

Senior convertible notes are a form of debt security with an option to convert into equity in the future. Holders also get priority in case the company files for bankruptcy or goes into liquidation.

MicroStrategy Doubles Down On Bitcoin Amid Recent Rally

Bitcoin bull Michael Saylor, a co-founder of the firm, has been doubling down on Bitcoin and bought 3,000 more BTC last month at a price of around $51,813 each.

The firm currently sits at an unrealized profit of $6 billion on its Bitcoin holdings. It purchased its current holdings at an average buy price of $31,550.

MicroStrategy has acquired an additional 3,000 BTC for ~$155 million at an average price of $51,813 per #bitcoin. As of 2/25/24, @MicroStrategy now hodls 193,000 $BTC acquired for ~$6.09 billion at an average price of $31,544 per bitcoin. $MSTR https://t.co/micudbYf3P

— Michael Saylor⚡️ (@saylor) February 26, 2024