US-based enterprise software company MicroStrategy Inc. announced Monday that it intends to raise $ 400 million through senior secured notes maturing in 2028 in a private offering to qualified institutional buyers. The company intends to use the net proceeds from the sale of the Notes to purchase additional Bitcoin.
MicroStrategy, headed by Michael Saylor, also announced that it will create a subsidiary, MacroStrategy LLC, which will hold approximately 92,079 bitcoins that it has acquired to date. The company’s total Bitcoin inventory is valued at around $ 3.37 billion at current prices.
The world’s oldest cryptocurrency, Bitcoin, saw a slight upward trend following the announcement, trading 2.1% higher at 36,595.82 at around 6:15 p.m. IST, according to CoinGecko.
Earlier in the day, the digital asset traded unchanged amid a series of positive and negative developments. While China’s Twitter-like Weibo platform suspended crypto-related accounts over the weekend, the South American nation of El Salvador said it intends to become the first country in the world to make Bitcoin legal tender.
Michael Saylor said the Notes are fully and unconditionally guaranteed on a senior secured basis by MicroStrategy Services Corporation, a wholly-owned subsidiary of MicroStrategy, and certain MicroStrategy subsidiaries that may be incorporated or acquired after the closing of the offering.
“The Notes and their associated guarantees will be secured on a senior secured basis against existing and future MicroStrategy senior liabilities by security interests in substantially all of MicroStrategy and the Guarantors’ assets, including any bitcoins or other digital assets, on or after the completion of the Offering but excluding MicroStrategy’s existing bitcoins and bitcoins and digital assets acquired with the proceeds from existing bitcoins, “the company said in a statement.
MicroStrategy is one of the earliest corporate supporters of the world’s oldest and largest cryptocurrency. The company had announced in August 2020 that it would use existing cash on its balance sheet to purchase the cryptocurrency.
Tesla announced in February that it had invested $ 1.5 billion in the digital currency. It is by far the largest company to have supported the cryptocurrency platform to date. However, in recent weeks, automaker founder Elon Musk has raised concerns about the environmental impact of the Bitcoin mining process.
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