- MicroStrategy have announced a desire to raise $400 million in order to increase their Bitcoin holding
- The company has already spent $475 million on Bitcoin from its own reserves
- This move represents an apparent change in Bitcoin strategy, from a hedge to an investment play
MicroStrategy, the software company that has turned into one of the biggest public backers of Bitcoin, has followed up its latest $50 million Bitcoin purchase by announcing a $400 million intended raise – with all the proceeds to go to more Bitcoin purchases. MicroStrategy announced its intention through a press release yesterday, stating that the proposal is in line with the company’s Treasury Reserve Policy. If purchased at today’s prices, the buy would take MicroStrategy’s Bitcoin holding to 61,688.
MicroStrategy Makes No Bones About Intention
So far, MicroStrategy has used $475 million of its own reserves to buy up almost ₿41,000 in three separate tranches since August, but its next step is to reach out to private investors to raise more capital to further increase this sum. In return for their outlay, investors will receive “convertible senior notes” which act as shares with an expiry date of December 15, 2025, after which they can be bought back by the company or converted into shares.
MicroStrategy makes no bones about the purpose of the investment:
MicroStrategy intends to invest the net proceeds from the sale of the notes in bitcoin in accordance with its Treasury Reserve Policy pending the identification of working capital needs and other general corporate purposes.
Raise Suggests Change in Strategy
This desire to spend the entire $400 million on Bitcoin could have a negative effect on MicroStrategy’s ability to accomplish the raise, given the amount of skepticism that still exists about Bitcoin. No matter how much confidence potential investors may have in the company, knowing that the value of their investment is in many ways tied to the Bitcoin price will likely keep some money away.
The move also represents a shift in policy from MicroStrategy, who seem to have gone from using Bitcoin as a hedge to seeing it as an investment strategy.
