The Bitcoin This Tuesday it maintains its bullish momentum and closes the distance with its historical maximum that it reached six days ago of US$93,477.11. In this way, BTC has a return so far in 2024 of almost 159% and in November it climbs almost 34%. The volume traded in the last 24 hours exceeds US$50 billion and the market capitalization exceeds US$3.25 trillion.
In this context, the actions of MicroStrategy (MSTR) rose 13% on Monday and hit an all-time closing high after the company revealed it had acquired Bitcoin worth US$4.6 billions. The firm also announced plans to raise an additional $1.75 billion through convertible notes to increase its cryptocurrency holdings.
The performance of the company’s stock has been notable, rising more than 500% in 2024, far outperforming big stocks like Microsoft, which are only up 11% this year.
This exceptional growth reflects the success of MicroStrategy’s aggressive Bitcoin investment strategy under the leadership of its co-founder and CEO, Michael Saylor.
MicroStrategy owns 331,200 BTC
Michael Saylor, co-founder and president of MicroStrategy, focused the company’s attention on Bitcoin in 2020 as a shelter against inflation.
Initially using cash, the company began leveraging the capital raised by issuing shares and convertible bonds. MicroStrategy currently holds 331,200 BTC, purchased at an average price of $88,627.
The current value of its Bitcoin reserve puts the company in a strong position, with unrealized profits estimated at $13.7 billion.
To finance its Bitcoin acquisitions, MicroStrategy plans to issue 0% interest rate senior convertible notes, due December 2029.
These notes offer investors the option of converting debt into shares, a strategy that the company has used in previous issues, such as a US$875 million issue in September 2024 and another in June. The convertible note strategy allows MicroStrategy to secure low- or no-interest capital, which is then put toward the purchase of Bitcoin.
Investors find the conversion option attractive, particularly with the company’s impressive stock performance.
Holders of the notes can benefit from stock appreciation or choose to recover their principal at maturity.
However, MicroStrategy’s strategy is not without risks. Bitcoin’s known volatility represents a significant threat. A sharp drop in Bitcoin’s value could undermine the company’s financial stability and erode its profits.
Source: Ambito
