MicroStrategy Takes Fundraising to $7B for push into bitcoin

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Software provider turned bitcoin investor MicroStrategy has taken fundraising for its aggressive push to buy the cryptocurrency to more than $7 billion. since the US election, when the price hit a new record high.

The company on Wednesday raised the size of a convertible bond offering from $1.75 billion. to $2.6 billion as it looks to capitalize on the euphoria in digital assets since Donald Trump’s victory in the US presidential election earlier this month.

That comes on top of the $4.6 billion it raised in a stock sale last week, which has also gone into buying more bitcoin.

MicroStrategy’s shares jumped 15 percent on Wednesday to a record high and are up nearly 900 percent in the past year.

MicroStrategy’s post-election acquisition underscores its commitment to buying as much bitcoin as it can since chairman and founder Michael Saylor set the company on that path in August 2020. Last month, the California-based group announced plans to raise $42 billion. from equity and debt sales in the coming years to plow into the cryptocurrency.

“I think it reflects not only the market’s embrace of the company’s approach, but also the mood of the moment: that MicroStrategy really has the right strategy at the right time given the expected support of bitcoin and crypto from the Trump administration, especially as it relates to a more supportive regulatory environment,” said Mark Palmer, a senior equity analyst at Benchmark Company.

MicroStrategy’s purchases have helped drive the price of bitcoin to record highs this month. On Wednesday, it hit nearly $95,000, having surged 33 percent since the election of Trump and pro-crypto lawmakers in Congress.

The firm has become the world’s largest corporate owner of the token, buying more than 50,000 bitcoin since the election, bringing its holdings to about 331,000 bitcoin — worth about $31 billion.

Saylor is “probably the greatest hedge fund manager of all time,” said Jad Comair, founder of crypto investment firm Melanion Capital.

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The industry has cheered Trump’s victory this month, predicting a coming “golden age” as the new president ushers in an era of looser regulation of crypto in the US.

Under President Joe Biden, crypto-related companies have faced a flurry of civil and criminal lawsuits from US regulators. The Securities and Exchange Commission has secured billions in fines over the past decade, topped by the $4.5 billion in fines that Terraform Labs and its co-founder Do Kwon were ordered to pay in June.

MicroStrategy is also taking advantage of a bullish US stock market, which has hit new highs this year.

“Bitcoin is manifest destiny for the United States,” Saylor said in an X post last week, referring to the 19th-century slogan that encouraged American settlers to push into the country’s western lands.

MicroStrategy managed to significantly increase the size of its bond offering, which can be converted into company shares at a 55 percent premium to Tuesday afternoon’s average price, although the five-year debt carries a zero percent coupon. This performance demonstrates “the enormous potential market for MicroStrategy securities,” Palmer said.

Mara Holdings, a cryptocurrency miner, has also turned to the stock market with an $850 million five-year convertible bond offering this week. This offer was also subscribed several times and increased from $700 million.

Funds raised by crypto companies, including MicroStrategy, on the US stock market this year total $9.8 billion, surpassing the previous record of nearly $3.4 billion. in 2021, according to data from Dealogic.

Additional reporting by Ray Douglas and Laurence Fletcher

This story has been amended to reflect that MicroStrategy announced plans to raise $42 billion. last month