Following MicroStrategy Inc. looking to raise $400 million to increase its Bitcoin holdings, it boosted the size of its recent bond sale announced on Monday to fund the purchase of more Bitcoin to $500 million.
After the initial $400 million bond sale was announced, the company received about $1.6 billion in orders for the offering, including interest from a large number of hedge funds, according to people with knowledge of the marketing process, who asked not to be identified discussing a private transaction. This strong demand comes as the value of Bitcoin seems to be dwindling southward.
MicroStrategy, led by Michael Saylor, emerged as one of the most bullish public companies on cryptocurrencies. It has already issued convertible bonds worth around $1 billion in its bid to acquire more of the flagship cryptocurrency. Saylor’s focus on Bitcoin, including making it an official corporate strategy, has drawn a lot of negative comments from critics.
MicroStrategy sold the secured notes at a yield of 6.125%, according to a person with knowledge of the matter, lower than early pricing discussions of 6.25% to 6.5%.
The Tysons Corner, Virginia-based company said in a filing on Monday that it’s taking a roughly $284.5 million charge during its next earnings report due to losses related to fluctuations in the price of the digital asset. That amounts to more than the company’s cumulative earnings since 2011.
MicroStrategy had amassed 92,079 Bitcoins as of May 2021, which it says were acquired for about $2.25 billion at an average of about $24,450 per token.
MicroStrategy (MSTR) is currently trading $459.38, down 2.22% for the day.