Microstrategy Is In the Mood: Wants to Utilize Bonds’ Sale Proceeds for Bitcoin Acquisition

Microstrategy was short of under-dozen thousand dollars to bring up 100,000 Bitcoins within its holding by disposing of off its bonds i.e. secured notes for an amount of US$ 400 Million. It said that the sale proceeds from the bonds shall be utilized for the acquisition of further Bitcoins.

Two of the industrial giants namely Tesla Inc. and Microstrategy Inc. are renowned for putting more into Bitcoin. However, in the recent past, Tesla had left Bitcoin alone for the time being due to reasons of an environmental hazard. Yet, the company has not disposed of any single unit of Bitcoin even if it has refused to buy further Bitcoins. But in comparison with Tesla, Microstrategy is continuing on its mission of acquiring more Bitcoins.

The last investment of Microstrategy was sent into Bitcoin last month where only a couple of hundred Bitcoins were purchased. At then, the total holding of Microstrategy of Bitcoin went up to 92,079. This started a craze amongst crypto community members who were glued as to when Microstrategy’s Bitcoin holding will top 100,000. Even the company, started to adhere to public opinion and set up an aim of achieving the target.

On 7th June 2021, it has been announced Microstrategy that he will be purchasing more Bitcoins. It said that this time it will make sure that Microstrategy’s holding crosses 100,000 Bitcoins. As regards how Microstrategy will acquire the remaining Bitcoins, it said that it will dispose of its assets.

The company told that it has available with it “senior secRued notes”. For the purposes of Bitcoin acquisition, these secured notes will be sold in an open market. Microstrategy is expecting that with the sale of these notes, it will be able to collect an amount of US$ 400. The entire sale proceeds of secured notes will then be exclusively utilized towards Bitcoin purchase, told Microstrategy.

Microstrategy informed that the existing Bitcoin holding plus the proposed purchase of Bitcoins will be given to another company. A new company will be set up by Microstrategy under the name of “Microstrategy LLC” where Bitcoin assets will be kept.

For instance, Microstrategy is able to sell the bonds for an amount of US$ 400 Million then the fund will be kept for Bitcoin purchase. There is only 7,921 Bitcoin required for Microstrategy to complete 100,000 Bitcoin holding. For the time being, a Bitcoin unit is trading hands at a price of US$ 36,116. If the US$ 400,000 is utilized towards Bitcoin acquisition, then Microstrategy will be able to bring 11,075 additional Bitcoins. This would mean that the Bitcoin holding will go past 100,000 and become 103,154.

But firstly the sale of bonds is required to take place and a new company will need to be established.