Bitcoin: MicroStrategy's Stock Collapses After Announcement Of A Mega Fundraising Effort

The company of Michael Saylor continues its strategy of aggressive accumulation of bitcoin with a new major fundraising, even as its stock undergoes a brutal correction in the markets.

MicroStrategy raises 3 billion dollars to buy Bitcoin

MicroStrategy, a leader in economic monitoring, finalized on November 21 a senior convertible bond issuance at 0% with a value of 3 billion dollars, maturing in 2029.

This operation is part of a larger plan aiming to raise 42 billion dollars over three years to acquire more bitcoin. The same day, the MSTR stock dropped by more than 25%, falling from 536.7$ to 397.28$ at close.

These bonds, issued with a conversion premium of 55% and an exercise price of about 672$, will pay no interest to holders. The total funds raised could allow the acquisition of about 30,600 bitcoins at current prices.

This new issuance comes just a few days after a previous fundraising, initially set at 1.75 billion dollars and then increased to 2.6 billion dollars on November 20.

A risky bet that divides investors

The aggressive strategy of MicroStrategy has garnered mixed reactions among investors. Citron Research notably announced that it had closed its short position on the stock, arguing that the stock had become “overheated” and that its trading volume had “completely detached from the fundamentals of Bitcoin.”

Despite the recent correction, MSTR remains one of the big winners of 2024 with a performance of +480% since January. The company currently holds 331,200 bitcoins, valued at over 32.7 billion dollars, making it the largest publicly traded institutional holder.

The stock has become a true barometer of the crypto sector, contributing to a record trading volume of 70 billion dollars on November 21 within the “Bitcoin industrial complex,” which includes American spot Bitcoin ETFs and other entities like Coinbase.

The bold strategy of Michael Saylor continues to polarize the market, as Bitcoin hovers around 98,400$, just shy of the symbolic threshold of 100,000$.