MicroStrategy, the software maker turned bitcoin powerhouse, raised its convertible bond offering to $2.6 billion, boosting its post-election crypto buying spree. The firm, led by Michael Saylor, has acquired over 50,000 bitcoins since Trump’s pro-crypto administration took office, propelling its holdings to 331,000 tokens worth $31 billion. With its shares soaring nearly 900% in a year, MicroStrategy cements itself as a crypto trailblazer amid a booming digital asset market.
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By Will Schmitt in New York
___STEADY_PAYWALL___Software maker turned crypto investor increases size of convertible bond offering to $2.6bn
Software provider turned bitcoin investor MicroStrategy has taken fundraising for its aggressive push into buying the cryptocurrency to more than $7bn since the US election, as the price hit a new record high.
The firm on Wednesday raised the size of a convertible bond offering from $1.75bn to $2.6bn, as it looks to exploit the euphoria in digital assets since Donald Trump’s victory in the US presidential election earlier this month.
That comes on top of the $4.6bn it raised in a stock sale last week, which has also gone into buying more bitcoin.
MicroStrategy’s shares jumped 15 per cent on Wednesday to a record high, and are up nearly 900 per cent in the past year.
MicroStrategy’s post-election buying spree underscores its commitment to buying as much bitcoin as it can since executive chair and founder Michael Saylor put the company on that path in August 2020. Last month the Californian group announced plans to raise $42bn from shares and debt sales in the coming years to plough into the cryptocurrency.
“I think it reflects not only the market’s embrace of the company’s approach, but also the mood of the moment: that MicroStrategy has really the right strategy at the right time given the anticipated support of bitcoin and crypto by the Trump administration, particularly as it pertains to a more supportive regulatory environment,” said Mark Palmer, a senior equity analyst with the Benchmark Company.
MicroStrategy’s buying has helped drive the price of bitcoin to a record this month. On Wednesday it hit nearly $95,000, having risen 33 per cent since the election of Trump and pro-crypto legislators in Congress.
The firm has become the world’s largest corporate owner of the token and has bought more than 50,000 bitcoin since the election, taking its holdings to around 331,000 bitcoin — worth about $31bn.
Saylor is “probably the greatest hedge fund manager ever”, said Jad Comair, founder of crypto investment firm Melanion Capital.
The industry has gleefully welcomed Trump’s victory this month, forecasting a coming “golden age” as the new president ushers in an era of looser regulation of crypto in the US.
Under President Joe Biden, crypto-related companies have faced a barrage of civil and criminal lawsuits from US regulators. The Securities and Exchange Commission has secured billions in fines over the past decade, topped by the $4.5bn in penalties that Terraform Labs and its co-founder Do Kwon were ordered to pay in June.
MicroStrategy is also tapping a bullish US equity market, which has hit fresh highs this year.
“Bitcoin is Manifest Destiny for the United States,” Saylor said in an X post last week, referring to the 19th-century slogan that encouraged American settlers to push into the country’s western lands.
MicroStrategy managed to significantly increase the size of its bond offering, which is convertible to company stock at a 55 per cent premium to Tuesday afternoon’s average price, even though the five-year debt offers a coupon of zero per cent. That accomplishment demonstrates “the enormous potential market for MicroStrategy securities”, Palmer said.
Mara Holdings, a cryptocurrency miner, has also turned to the equity market with a $850mn five-year convertible bond offering of its own this week. That offering, too, was several times subscribed and increased from $700mn.
Funds raised by crypto companies, including MicroStrategy, on the US equity market this year total $9.8bn, surpassing the previous record of nearly $3.4bn in 2021, according to data from Dealogic.
Read also:
- Bitcoin surges past $89K amid hopes for pro-crypto Trump policies
- Bitcoin halving completes: Miners face revenue cuts amidst rising transaction fees
- Bitcoin is gaining unprecedented institutional support – From Wall Street to state governments
© 2024 The Financial Times Ltd.
