MicroStrategy shares rise after revealing plans to buy more bitcoin

MicroStrategy shares rose more than 5% in pre-market trading on Tuesday after the enterprise software company announced its intentions to buy more bitcoin.

In a press release, MicroStrategy said it plans to offer $ 600 million in senior convertible notes and use the net proceeds to buy bitcoins.

The company already owns nearly 72,000 units of bitcoin, as of a February 2 regulatory filing. That is worth nearly $ 3.6 billion based on the price of the virtual currency on Tuesday.

It is the second time that MicroStrategy has raised funds to finance the purchase of the cryptocurrency. In December, the Virginia-based company closed an offering of senior convertible notes for $ 650 million.

Convertible notes are debt, but they can be converted to company shares, cash, or a combination of both at a later date.

Under the leadership of President and CEO Michael Saylor, MicroStrategy became an early adopter of companies buying bitcoin as an investment. The company revealed its first purchase of the cryptocurrency in August, acquiring 21,454 bitcoins using existing cash on its balance sheet.

Saylor advocates for other companies to do the same, hosting a virtual conference earlier this month called “Bitcoin for Corporations.” Saylor publicly encouraged Tesla CEO Elon Musk to follow his “playbook” in a Twitter conversation in December. A little over a month later, Tesla announced that it bought $ 1.5 billion worth of bitcoins and had plans to eventually accept the digital currency as payment for its products.

The price of bitcoin hit $ 50,000 per coin for the first time on Tuesday morning, continuing its rally in recent days when several established financial firms such as BNY Mellon and Mastercard announced moves in the crypto space.

MicroStrategy shares have soared since August as some investors have viewed the shares as a way to gain exposure to bitcoin. The shares have risen more than 660% since August 11, the date the company revealed its first bitcoin purchase.

The stock reached a 52-week high of $ 1,315 on February 9.


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