MicroStrategy's $500M Bitcoin Buy
MicroStrategy Raises $500M for Bitcoin Purchases
MicroStrategy, a leading corporate Bitcoin holder, announced a significant move to expand its Bitcoin reserves. The company launched a $500 million offering of Series A Perpetual Strife Preferred Stock (STRF).
Key Highlights of the Offering:
- Funding Source: The offering aims to raise capital for additional Bitcoin acquisitions and general corporate purposes.
- Investor Access: Available to institutional investors and select retail investors.
- Dividend Rate: A 10% annual fixed dividend rate, payable quarterly, with compounding at 11% (increasing up to 18%) if dividends are unpaid.
- Liquidation Preference: An initial liquidation preference of $100 per share, with daily adjustments.
- Redemption Rights: MicroStrategy retains the right to redeem shares under specific conditions (e.g., outstanding shares falling below 25% of total issued shares).
- Underwriters: Morgan Stanley, Barclays Capital, Citigroup Global Markets, and Moelis & Company are serving as joint book-running managers.
This offering follows MicroStrategy's recent purchase of 130 Bitcoin at an average price of $82,981 per token. This brings their total Bitcoin holdings to an impressive 499,226 BTC, representing a substantial portion of the total Bitcoin supply.
Implications for the Market
MicroStrategy's continued commitment to Bitcoin underscores the growing institutional interest in the cryptocurrency. This significant capital raise demonstrates a bullish outlook on Bitcoin's long-term value. The offering's terms, including the substantial dividend and compounding interest on unpaid dividends, may attract investors seeking both capital appreciation and yield.
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