MicroStrategy has announced a third debt issuance in 2024 to restructure debt and buy more Bitcoin.
Technology company MicroStrategy (MSTR) has just announced its third debt issuance in 2024, aiming to raise $700 million through the issuance of convertible bonds maturing in 2028.
MicroStrategy plans to use the proceeds to pay down some of its existing debt. The proceeds will be used to repay $500 million of its existing senior secured notes and purchase additional Bitcoin , according to the announcement. The remaining funds will be used for general corporate purposes. Debt restructuring is a common strategy among businesses, replacing old debt with new debt on more favorable terms.
The bonds will be unsecured and will start paying interest from March 2025. The issuance is only open to qualified institutional investors.
This is MicroStrategy's third debt issuance in 2024. The company previously raised about $700 million in March and $500 million in June through the issuance of convertible bonds due in 2032.
MicroStrategy said the debt issuances are part of a strategy to use debt to buy more Bitcoin. The company is now one of the world's largest institutional holders of Bitcoin with 244,800 BTC, worth about $14 billion as of September 13.
This massive amount of Bitcoin has significantly affected the company's financial situation. MicroStrategy recorded a net loss of $102.6 million, equivalent to $5.74 per share, in the second quarter of 2024, a sharp decrease from a net profit of $22.2 million in the same period last year. This loss was mainly due to a loss of digital assets of up to $180.1 million, resulting from the volatility of the Bitcoin market.
Despite analysts’ concerns about the risks associated with Bitcoin, MicroStrategy’s stock has been quite positive. The stock has risen nearly 295% over the past 12 months, reaching $134 as of September 16. Since the beginning of 2024, MicroStrategy’s stock has risen 96%.
Follow CoinMoi to update the hottest issues of the crypto market ok!!!
The article MicroStrategy Announces Third Debt Issuance in 2024 appeared first on CoinMoi .
