MicroStrategy issues second convertible debt this month to buy more bitcoin

Its dropped 8% on Thursday, after hitting a 24-year high in the previous session. The stock has surged nearly threefold so far in 2024.

Bitcoin hit a fresh record high at $73,803, taking its year-to-date gains to nearly 70%.

The Tysons, Virginia-based firm joined a slew of companies offering convertible bonds in a high environment.

"MicroStrategy is now single handedly making it clear there is nothing restrictive about the (monetary) policy environment," said Michael O'Rourke, chief market strategist at JonesTrading.

"Since late 2020, the company has come to market with convertible offerings and to a lesser extent at-the-market stock offerings for the specific purpose of investing the proceeds in bitcoin. It appears it is now becoming a weekly event."

Convertible notes, which can be exchanged for shares when the stock hits a predetermined level, offer companies an option to raise capital at lower interest rates than regular bonds without the of immediately diluting shareholders like stock offerings do.

MicroStrategy, which began buying and holding bitcoins in 2020, is the largest corporate holder of the cryptocurrency as from its software eased in 2022 and 2023.

The company bought 15,000 bitcoins since Feb. 15, taking its total holdings to 205,000 as of March 10.

Source: Forex-Markets-Economic Times