MicroStrategy soars 23% in a day, outperforming BTC, plans to issue $600 million in convertible bonds to buy Bitcoin

Software development company MicroStrategy (MSTR), whose primary business is holding Bitcoin, saw a surge of over 23% in its stock price yesterday, reaching $1,334, driven by the increase in Bitcoin's price. This price surpasses the high point at the beginning of 2021. MicroStrategy, which already holds 193,000 Bitcoins, boldly announced that they will issue an additional $600 million in convertible senior notes to further invest in Bitcoin and for general corporate purposes.

MicroStrategy to Raise $600 Million in Debt to Purchase Bitcoin

MicroStrategy has announced that it intends to offer $600 million of convertible senior notes due in 2030 in a private offering to qualified institutional buyers. The proposed terms of the offering are as follows:

• Maturity Date: March 15, 2030
• Interest Payment: Semi-annually on March 15 and September 15
• Conversion: Convertible into cash, MicroStrategy Class A common stock, or a combination of both under certain circumstances and during specified periods

The interest rate, conversion rate, conversion price, and other terms of the notes will be determined at the time of pricing.

MicroStrategy intends to use the net proceeds from the sale of the notes to acquire additional Bitcoin for general corporate purposes.

MicroStrategy Reports Unrealized Gains of Up to $7 Billion

MicroStrategy currently holds 193,000 BTC with an average cost of $31,544. Based on the current price of Bitcoin reaching $68,000, the value of MicroStrategy's Bitcoin holdings exceeds $13 billion, with unrealized gains of up to $7 billion.

Despite investment bank Benchmark recently giving a buy rating with a target price of $990, there are also investors in the market taking short positions. According to the latest data from Nasdaq as of 2/15, short interest accounts for approximately 17% of the company's total outstanding shares.