Bitcoin’s Biggest Corporate Investor Raises $500 Million To Buy More—Topping Expectations As Crypto Surges

Top line

Less than a week after the offer was announced, business analytics firm MicroStrategy, which owns more Bitcoin than any other company in the world, has borrowed $ 500 million to buy more of the world’s largest cryptocurrency – a sign of that that institutional investors are still optimistic about the token future as it offsets losses from a crash last month.

Important facts

MicroStrategy based in Virginia said On Monday morning, it completed a $ 500 million offering in secured notes maturing in 2028, more than its target of $ 400 million announced last week.

MicroStrategy says net proceeds from the sale (after deducting commissions and other expenses) will be approximately $ 488 million, all of which will be used to purchase additional bitcoins.

As a sign of massive interest from institutional investors, the company has allegedly received more than $ 1.5 billion in orders for the offering announced Monday while Bitcoin prices were at a monthly low of about $ 33,400.

MicroStrategy shares rose nearly 15% after the announcement, increasing year-to-date gains to nearly 40%.

The company has not yet announced when it will buy more Bitcoin, but as of Monday morning it owns around 92,079 tokens valued at nearly $ 3.8 billion.

tangent

Bitcoin prices rose more than 13% on Monday morning after Tesla CEO Elon Musk, who previously fueled the token’s volatility, said the company would on Sunday continue Bitcoin transactions once around half of all clean energy mining is done Tesla, the second largest corporate investor in Bitcoin, stopped Invested in the token last month due to concerns about its carbon footprint.

Key background

Given its oversized crypto investment, MicroStrategy’s stock tends to ride the incredibly volatile price wave of Bitcoin. In a filing last Monday, the company said it expected an impairment loss of at least $ 284.5 million in the second quarter, “based on the fluctuations in the market price of Bitcoin.” Shares have fallen more than 50% since February when Bitcoin fell after Tesla CEO Elon Musk said prices looked “a little high”. Cryptocurrency is down about 40% over the same period, but like MicroStrategy, prices have increased more than 300% over the past year.

Surprising fact

MicroStrategy owns more Bitcoin than any publicly traded company, but investment manager Grayscale owns 654,885 tokens valued at more than $ 24 billion in its Bitcoin fund of the same name.

further reading

Bitcoin’s largest corporate backer expects a loss of $ 285 million after the crypto crash – but plans to raise $ 400 million in debt to buy more (Forbes)

Musk denies the “pumping and dumping” of Bitcoin – and says Tesla will resume transactions once that mining target is met (Forbes)

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