MicroStrategy Proposes Private Offering of $400 Million To Buy More Bitcoin

Wednesday 09 June 2021, 10:00 AM AEST - 1 week ago

MicroStrategy has announced offering US$400 million worth of Senior Secured Notes due in 2028 and using the funds to buy Bitcoin (BTC).

On June 7, the company said the secure notes will be available to qualified investors. This will be the first time a corporation issues a junk bond sale to buy cryptoassets.

MicroStrategy Ignores the Risks

MicroStrategy reported an overall operating loss of US$183.2 million, led by a $194.1 million impairment in the last quarter. MicroStrategy’s MSTR stock has been down more than 60 percent since February 2021 – added to a massive debt and over-leveraged exposure to BTC.

MicroStrategy already owns 92,079 Bitcoins, which would account for roughly US$3 billion at press time. The firm said it needed to write down the value of its assets by approximately US$284.5 million in the next quarter due to BTC’s price plunge.

Many in the crypto community are considering this a risky move. But it seems the firm hasn’t given up on the father of all cryptos, and it’s showing it with this recent junk bond sale.

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