Shares of MicroStrategy (NASDAQ:MSTR) gained in pre-market trading after the company announced a proposed private offering to buy more Bitcoin (BTC-USD). The software company, with substantial investments in Bitcoin, disclosed a private offering of $500 million in convertible senior notes due in 2031 to qualified institutional buyers. The company expects to grant the initial purchasers of the notes a 13-day option to purchase up to an additional $75 million aggregate principal amount of the notes.
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The unsecured senior notes will bear semi-annual interest in arrears on March 15 and September 15 each year and mature on March 15, 2031. MicroStrategy may redeem all or some of these notes from March 22, 2028, onwards. The holders of these notes will have the right to require the company to repurchase for cash all or any portion of their notes on September 15, 2028.
MSTR will use the proceeds from the sale of these notes to purchase additional Bitcoins and for general corporate purposes.
CEO Michael Saylor Is Bullish About Crypto
The company’s founder and Chairman, Michael Saylor is bullish about cryptocurrency. Earlier this week, Saylor announced on X that the company has bought 12,000 Bitcoins worth $822 million, adding to their total of 205,000 Bitcoins valued at over $15 billion. Moreover, he told CNBC‘s Squawk Box that Bitcoin is going to “eat gold.”
According to a CNBC report, MSTR has purchased around 16,000 Bitcoins this year. The report cited Canaccord Genuity analysts as saying that the company’s “equity value premium over its Bitcoin holdings was 86%.”
Year-to-date, MSTR stock has skyrocketed by more than 100% while Bitcoin has surged by more than 60% during the same period.
Is MSTR a Good Buy?
Analysts remain bullish about MSTR with a Strong Buy consensus rating based on four Buys. The average MSTR price target of $1,383.33 implies a downside potential of 21.7% at current levels.
