Microstrategy (MSTR) Given $900M of 'Free Money' That Could Nearly Double its Bitcoin Hoard

February 17, 2021 7:47 AM EST

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Microstrategy, Inc. (NASDAQ: MSTR) is poised to increase its bitcoin holdings after the company priced its $900 million senior convertible notes offering. The note offering was 50% more than the original $600 million expected and also come with a 0% interest rate to the company. The notes are due in 2027.

The conversion rate for the notes will initially be 0.6981 shares of MicroStrategy class A common stock per $1,000 principal amount of notes, which is equivalent to an initial conversion price of approximately $1,432.46 per share. This represents a premium of approximately 50% over the last reported sale price of $955.00 per share of MicroStrategy class A common stock on The Nasdaq Global Select Market on February 16, 2021.

In December, the company raised $650 million via a 0.750% convertible senior notes offering.

This suggests investors are willing to give Microstrategy more money, free of charge to put to work in bitcoin.

As of February 2, 2021, Microstrategy holds approximately 71,079 bitcoins that were acquired at an aggregate purchase price of $1.145 billion and an average purchase price of approximately $16,109 per bitcoin, inclusive of fees and expenses.

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