MicroStrategy Announces an Additional $500 Million Bitcoin Purchase, but Stock Price Plummets Nearly 8%: Has BTC's Pulling Power Failed?

MicroStrategy, a dominant Bitcoin holder among publicly traded U.S. companies, announced late yesterday its plan to issue $500 million worth of convertible senior notes due 2032 through a private offering to qualified institutional investors.

Continuing to Increase Bitcoin Holdings MicroStrategy explained in the announcement that the convertible senior notes would meet the following basic conditions:

• They will be MicroStrategy's unsecured senior obligations, with interest payable to investors, and will be settled semiannually on June 15 and December 15 each year starting from December 15, 2024.
• After June 20, 2029, MicroStrategy may redeem some or all of the notes in cash.
• Noteholders have the right to require MicroStrategy to repurchase all or part of their notes in cash on June 15, 2029.
• The interest rate, initial conversion rate, and other terms of the notes will be determined at the time of pricing.

More importantly, MicroStrategy stated that the proceeds from this bond issuance would continue to be used to purchase more Bitcoin:

"MicroStrategy intends to use the net proceeds from the sale of these notes to purchase additional Bitcoin and for general corporate purposes."

MSTR Falls Nearly 8% at Market Open

Since MicroStrategy announced its continuous investment in Bitcoin in August 2020, its stock (MSTR) has entered a surge mode and experienced a concentrated boom period with the arrival of the Bitcoin bull market. The stock price has often been stimulated by multiple announcements of increasing Bitcoin holdings this year.

However, this time, although MSTR rose 3.1% in pre-market trading, it subsequently plummeted, closing at $1,483.88, down 7.47%. Although Bitcoin's performance was also poor last night, MSTR's decline was steeper, indicating that frequent increases in holdings seem to be losing their effect on pulling up the stock price.

Bitcoin surged to $70,000 briefly after the CPI announcement the night before last but continued to decline afterward, hitting a low of $66,258 at midnight today (14th), and was at $66,630 at the time of writing, down 2.4% in the past 24 hours.

MicroStrategy's Bitcoin Unrealized Gains at $6.73 Billion

Despite Bitcoin's continued volatility, according to the latest data from bitcointreasuries, MicroStrategy currently holds 214,400 BTC with a purchase cost of approximately $7.543 billion and a current total value of $14.276 billion, resulting in an unrealized gain of $6.73 billion.