After Bitcoin fell 50%, MicroStrategy made an additional investment of $500 million

Michael Saylor raised a huge bet on Bitcoin in MicroStrategy, borrowing $500 million through junk bonds to invest in Bitcoin asset allocation, which was $100 million more than expected.

As reported in many news, Michael Saylor’s MicroStrategy company issued junk bonds.

MicroStrategy said it will borrow approximately US$500 million in the form of secured notes. When the price of the flagship cryptocurrency Bitcoin is more than 50% lower than its historical high, all the funds raised will be used to buy more Bitcoin.

Saylor’s Virginia-based business software company announced on Tuesday that it has sold $500 million in high-yield bonds with an annual interest rate of 6.125% and a maturity date of 2028. The bonds are considered to be the first batch directly related to the purchase of Bitcoin. Bonds.

After Bitcoin fell by 50%, MicroStrategy added an additional $500 million in investment

The value of this transaction exceeded the $400 million that the company had hoped to raise. According to relevant data, MicroStrategy has received approximately $1.6 billion in orders. Bloomberg quoted people familiar with the matter as saying that a large number of hedge funds have expressed interest in this.

According to the MicroStrategy report, MicroStrategy intends to use the net proceeds from the sale of these bonds to obtain more bitcoins.

The business analytics software company added that it will borrow from “qualified institutional buyers” and “people outside the United States.”

Saylor is one of the most bullish advocates of Bitcoin in the market. MicroStrategy currently has approximately 92,000 bitcoins, which are worth approximately $3.2 billion this Wednesday. MicroStrategy has previously issued bonds to purchase this encrypted asset.

The company expects that the latest bond issue will provide it with $488 million in funding to buy more bitcoins.

However, given the extreme volatility of Bitcoin, Saylor’s method of raising funds through high-yield bonds to obtain more Bitcoins has certain risks.

After Bitcoin fell by 50%, MicroStrategy added an additional $500 million in investment

MicroStrategy announced on Tuesday that because the value of Bitcoin has fallen 42% since the end of March, the company expects a loss of $284.5 million in the second quarter.

On Tuesday, the market price of Bitcoin was approximately $34,300, a drop of more than 45% from the April high of 65,000. After Tesla CEO Elon Musk refused to continue accepting Bitcoin as a payment method, and the Asian region tightened its control of the market, MicroStrategy’s stock price fell sharply.

At the 2021 Miami Bitcoin Conference held earlier this month, Saylor’s discussion of Bitcoin’s return on investment made it possible to borrow to invest in Bitcoin.

“MicroStrategy realized that if crypto assets grow by more than 10% per year, you can borrow at 5% or 4% or 3% or 2%, then you should raise as much borrowing as possible and convert it into crypto assets.”

The MicroStrategy CEO also revealed that MicroStrategy’s investment in Bitcoin has significantly improved the company’s financial performance.

“The reason why we say that Bitcoin is a hope is because Bitcoin has repaired everything, including our stocks. This is the truth. It has injected vitality into the company and greatly improved morale. We have just passed ten years. The best first quarter of the year.”



Post time: Jun-10-2021