MicroStrategy to offer $400 Million in notes to buy more Bitcoin in 2021

MicroStrategy (MSTR) said Monday it intends to offer $400 million (U.S.) in senior notes to purchase additional Bitcoin.

Shares of the Tysons Corner, Va., analytics software and services provider were off 1 percent to $479.66 in trading Monday.

MicroStrategy said in a statement that it “intends to use the net proceeds from the sale of the notes to acquire additional Bitcoins.”

The notes will be guaranteed by MicroStrategy Services Corp., a subsidiary of MicroStrategy, and certain subsidiaries of MicroStrategy that may be formed or acquired after the closing of the offering.

MicroStrategy said its existing roughly 92,079 Bitcoins will be held by a newly formed subsidiary, MacroStrategy LLC.

In addition, MicroStrategy said in a regulatory filing Monday that it expects to incur an impairment loss of at least $284.5 million related to its Bitcoin for the three months ending June 30, “based on the fluctuations in the market price of bitcoin during the second quarter of 2021.”

Cryptocurrency prices tumbled last month following a statement from the People’s Bank of China that the digital coins weren’t “real currencies” and amid a general market pullback. China reiterated a call for a crackdown on Bitcoin mining and trading.

MicroStrategy CEO Michael Saylor recently described Bitcoin as “the most efficient use of energy the human race has come up with.”

Last month, Saylor announced on Twitter that the company had purchased an additional 229 Bitcoin for $10 million at the average price of $43,663.

The purchase occurred after Tesla (TSLA) CEO Elon Musk hinted that his clean-energy car company could sell all of its holdings in the digital currency.

MicroStrategy disclosed in March that disclosed it spent $15 million to buy 262 bitcoins, an average of $57,146 per coin including fees. The company bought another 19,452 bitcoin, for $1.03 billion in February.

Earlier this year, Saylor told Bloomberg that he was considering issuing more debt in order to help finance the company’s purchase of Bitcoin as part of its corporate strategy.

The company has also issued convertible bonds in its quest to buy more of the cryptocurrency.

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