MicroStrategy reveals details of its plan to buy more bitcoin worth $550 million
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Answer MicroStrategy reveals details of its plan to buy more bitcoin worth $550 million
The company “MicroStrategy” had previously bought a large amount of bitcoin, amounting to 475 million dollars, and was the first among the institutions interested in investing in bitcoin.
Recently, several press reports appeared that indicate To prepare MicroStrategy to buy Bitcoin for $400 million.
Then it was revealed that an amount of 550 million dollars had been allocated, an increase of 150 million dollars over the amount that appeared in the beginning.
MicroStrategy revealed more details about the amount allocated to buy bitcoin.
MicroStrategy announces the offering of convertible bonds
– Michael Saylor (@michael_saylor) December 9, 2020
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MicroStrategy’s plan is to buy more bitcoin by selling $550 million in highly convertible bonds at 0.750% to eligible institutional buyers.
For your information, a convertible bond is a debt bond that allows its holder to convert the value into cash, shares in the company, or a combination of the two.
Holders of these bonds receive interest, which will arrive in December 2025, twice a year.
MicroStrategy’s debt securities can be converted into 2.5126 shares of the company’s common stock, which are equivalent to $397.99 per share.
MicroStrategy reports that this reflects a 37.5% premium over the last reported selling price of its shares.
According to a press release issued on Monday, it said:
MicroStrategy intends to invest the net proceeds from the sale of banknotes in bitcoin in accordance with its Treasury reserve policy pending the identification of working capital needs and other general purposes of the company.
However, this bitcoin strategy has some drawbacks for the company.
Yesterday, Citi lowered MicroStrategy’s stock rating from “neutral” to “sell,” citing the company’s recent investments in bitcoin as a key factor in the recent rating update.
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