Cryptocurrencies

This billion-dollar company is buying Bitcoin again, this time for $786 million


Michael Saylor makes himself heard again. His publicly traded company MicroStrategy has $786 million almost 12 thousand Bitcoin purchased. With this purchase, the company now owns a total of 226,331 Bitcoin.

Sale of convertible notes

MicroStrategy recently raised $800 million with an accounting trick. Or yes, by making a promise on shares through a financial construction. Or something.

Michael Saylor mentions the sale of convertible notes.

A convertible note offering is a way for companies to raise money by issuing convertible debt. Convertible debt is a type of debt security that can be converted into company stock.

This means that investors who purchase convertible debt have the right to exchange their debt for shares of the company at some point in the future.

What do investors gain from this?

In return, investors accept the minimum annual return of 2.25% offered by these convertible bonds. In addition, convertible debt may be more attractive to investors than traditional equity because it requires a lower initial investment.

This is because the conversion price of the convertible debt is usually lower than the market price of the shares at the time the debt is issued. This means that investors have to invest less money to get the same number of shares they would buy if they were buying traditional shares.

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Average purchase price under $37,000

What has all this led to? According to Michael Saylor, MicroStrategy has a total of 226,331 Bitcoin on its balance sheet as of June 20, 2024. These coins have a value of $8.33 billion. This means that the company paid an average price of $36,798 per Bitcoin.

Prior to this most recent purchase, the company posted an impressive 83.7% increase, amounting to 6.3 billion in unrealized gains on their entire Bitcoin holdings.



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