MicroStrategy raises $3B for Bitcoin as shares drop 25%

MicroStrategy (MSTR) has completed a $3 billion offering of 0% convertible senior notes due in December 2029, with plans to allocate much of the funds toward acquiring Bitcoin (CRYPTO:BTC).  

This move is part of the company's ambitious "21/21" plan to raise $42 billion over three years through $21 billion in equity and $21 billion in fixed-income securities.  

The offering comes at a 55% premium, with an implied strike price of $672 for converting the notes into MicroStrategy’s Class A common stock.  

These 0% notes do not pay regular interest but will mature to face value unless converted before the maturity date.  

The notes are senior to common stock, giving holders priority in cases of bankruptcy or liquidation.  

If MicroStrategy uses the full $3 billion to buy Bitcoin, it could acquire approximately 30,600 BTC at current prices.  

The firm already holds 331,200 Bitcoin valued at over $32.7 billion, making it the largest Bitcoin holder among publicly traded companies.  

The announcement coincided with a sharp 25% drop in MSTR’s share price, falling from $536.70 to $397.28 on November 21, before recovering by 5.3% in after-hours trading.  

The decline followed a report from Citron Research, which hedged a short position on MSTR, citing that its valuation has "completely detached from BTC fundamentals."  

Despite the setback, MSTR has been one of the top-performing stocks in the U.S. markets in 2024, gaining 480% year-to-date.  

On November 21, the company contributed to a record $70 billion trading volume in the "Bitcoin Industrial Complex," which includes U.S. spot Bitcoin ETFs and Bitcoin-related stocks.  

With Bitcoin trading at $98,423, just 1.5% shy of the $100,000 milestone, MicroStrategy remains a key player in driving institutional adoption of the digital asset.  

At the time of reporting, the Bitcoin price was $99,048.21.