Bitcoin’s largest corporate investor is raising $ 500 million to buy more – exceeding expectations amid the surge in crypto

Top line

Less than a week after the offer was announced, business analytics firm MicroStrategy, which owns more Bitcoin than any other company in the world, has taken out $ 500 million in bonds to buy more of the world’s largest cryptocurrency – a Signs that institutional investors are still optimistic about the coin future as it offsets losses from a crash last month.

At a point in time worth more than $ 5 billion, MicroStrategy’s bitcoin holdings are now worth about $ 3.8 … [+] Billion.

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Important facts

Virginia-based MicroStrategy announced Monday morning that it had completed a $ 500 million offering in secured notes maturing in 2028, more than the $ 400 million target announced last week.

MicroStrategy says net proceeds from the sale (after deducting commissions and other expenses) will be approximately $ 488 million, all of which will be used to purchase additional bitcoins.

As a sign of massive interest from institutional investors, the company reportedly received more than $ 1.5 billion in orders for the offering, which was announced Monday, while Bitcoin prices were at a monthly low of about $ 33,400.

MicroStrategy shares rose nearly 15% after the announcement, increasing year-to-date gains to nearly 40%.

The company has not yet announced when it will buy more bitcoins, but as of Monday morning it has around 92,079 tokens valued at nearly $ 3.8 billion.

tangent

Bitcoin prices rose more than 13% on Monday morning after Tesla CEO Elon Musk, who previously fueled the token’s volatility, said on Sunday that the company would resume bitcoin transactions as soon as about half of all mining operations are in progress done with clean energy. Tesla, the second largest corporate investor in Bitcoin, stopped investing in the token last month due to concerns about its carbon footprint.

Key background

Given its oversized crypto investment, MicroStrategy’s stock tends to ride the incredibly volatile price wave of Bitcoin. In a filing last Monday, the company said it expected an impairment loss of at least $ 284.5 million in the second quarter, “based on the fluctuations in the market price of Bitcoin.” Shares have fallen more than 50% since February when Bitcoin fell after Tesla CEO Elon Musk said prices appeared to be “a little high”. Cryptocurrency is down about 40% over the same period, but like MicroStrategy, prices have increased more than 300% over the past year.

Surprising fact

MicroStrategy owns more Bitcoin than any publicly traded company, but investment manager Grayscale owns 654,885 tokens valued at more than $ 24 billion in its Bitcoin fund of the same name.

further reading

Bitcoin’s Biggest Corporate Backer Expects $ 285M Loss After Crypto Crash – But Wants To Raise $ 400M In Debt To Buy More (Forbes)

Musk denies “pumping and dumping” Bitcoin – and says Tesla will resume transactions once that mining target is met (Forbes)