As a seasoned researcher with a penchant for both technology and finance, I find MicroStrategy’s latest move to be a fascinating blend of innovation and risk-taking. Having closely followed the company’s journey since its inception, it’s clear that Michael Saylor and his team are not ones to shy away from bold decisions.
As a researcher, I’m sharing an update about MicroStrategy (MSTR). They’ve recently concluded a $3 billion offering of zero-coupon senior notes maturing in December 2029. The intriguing part is that they intend to utilize a significant portion or the entirety of these funds to further invest in Bitcoin.
On November 21st, it was reported that the business intelligence company had completed a project, while data from Google Finance indicated that their shares fell by more than 25%.
The senior convertible notes for MicroStrategy’s Class A common stock are priced 55% above, equivalent to an estimated exercise price of roughly $672. This is the set price where an options holder can either purchase or sell shares in MicroStrategy.
Instead of paying regular interest to bondholders, the 0% senior convertible note doesn’t offer such payments. Instead, these notes are sold at a lower price, and if they aren’t converted before the maturity date, they will increase in value to their face value.
In simpler terms, they are considered “senior” to regular stocks, which means their holders get preferential treatment during bankruptcy or liquidation proceedings; they will be paid off before other stockholders.
If MicroStrategy were to invest all $3 billion into Bitcoin, they would be able to acquire approximately 30,600 Bitcoins.
After announcing a plan to borrow $1.75 billion at zero interest on November 18th, and subsequently increasing it to $2.6 billion on November 20th, MicroStrategy is now pursuing a new offering worth $3 billion.
MicroStrategy’s ambitious strategies involve the acquisition of an additional $42 billion over the next three years, with this sum being divided into $21 billion in equity and $21 billion in bond offerings, as part of its “21/21” plan – a strategy centered around buying more Bitcoin.
As reported by Saylor Tracker, MicroStrategy is presently in possession of approximately 331,200 Bitcoins, valued at more than $32.7 billion, making it the public company with the largest Bitcoin holdings.
According to Cirtron Research’s recent disclosure, they covered a short position on MSTR. This implies that they believe the MSTR stocks have reached an excessive level, and their trading volume appears to be unrelated to the underlying Bitcoin fundamentals.
MSTR is still one of the best performers in the US markets in 2024, up 480% year-to-date.
On November 20th, MSTR became the second-most actively traded stock in the U.S., as an increasing number of investors considered the potential benefits and risks associated with investing in Bitcoin indirectly via MSTR.
On November 21st, Michael Saylor’s company played a part in setting a new record with a $70 billion trading volume within the “Bitcoin Financial Sector” – this sector encompasses American spot Bitcoin ETFs, stocks related to Bitcoin such as MSTR and COIN (Coinbase).
At the moment, the value of Bitcoin stands at approximately $98,423 – this figure is just shy of a 1.5% increase needed to reach the significant milestone of $100,000, according to information provided by CoinGecko.
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2024-11-22 03:14