Michael Saylor's MicroStrategy is raising $400 million of debt to acquire more bitcoin

Michael Saylor at Bitcoin 2021 Miami
Michael Saylor at Bitcoin 2021 Miami

Michael Saylor’s business intelligence firm, MicroStrategy, announced on Monday that it will offer $400 million of senior secured notes to qualified institutional buyers.

The notes will be due in 2028 and MicroStrategy plans to use proceeds from the transaction to buy more bitcoin, according to a press release.

The announcement comes after MicroStrategy disclosed it will be forced to take an impairment charge of nearly $285 million in the second quarter due to fluctuations in bitcoin’s price.

Microstrategy currently holds some 92,079 bitcoins bought for a total of $2.251 billion at an average price of about $24,450 per bitcoin. The company’s bitcoin holdings are currently worth roughly $3.3 billion.

Saylor, MicroStrategy’s CEO and a noted bitcoin evangelist, made an appearance at the Bitcoin 2021 Miami conference over the weekend where he discussed how he got into bitcoin, why he believes in the digital asset, and how adding bitcoin to his company’s balance sheet has helped it achieve its best run of performance in a decade.

“We say bitcoin is hope. Bitcoin fixes everything…that certainly was the case with our stock,” Saylor said. “It imbued life into the company…morale was dramatically boosted. We just had the best first quarter we’ve had in a decade.”

Saylor said the bitcoin purchases have helped MicroStrategy market its services, building brand awareness, and he expects to continue buying more digital assets.

“The big breakthrough is I can convert my cash from a liability to an asset and then we realized that if that asset is going to go up by more than 10% a year, and you can borrow money at 5% or four, or three, or two, then you should pretty much borrow as much money as you can and flip it into the asset,” Saylor said.

MicroStrategy stock is up more than 275% in the past year, but down 22% in the past month amid a drop in bitcoin’s price from April’s record highs above $63,000 per coin.

The company’s stock traded down 3.10% as of 11:04 a.m. ET on Monday.

MicroStrategy stock chart