Benchmark says MicroStrategy could soon generate yield by lending its bitcoin holdings
Quick Take
- Benchmark’s Mark Palmer says recent developments supportive of the crypto space could encourage MicroStrategy to begin to generate yield by lending out a portion of its bitcoin holdings.
- MicroStrategy’s balance sheet and financial profile could become stronger as it issues convertible notes to raise proceeds for adding to its bitcoin holdings.
Business intelligence company MicroStrategy (ticker MSTR) last week bought another 7,420 bitcoin for $458 million. The firm has now purchased more than 25,000 bitcoin over the past two months, bringing its total holdings to 252,220 BTC worth about $15.8 billion.
Its latest purchase was completed following an upsized $1.01 billion private offering of convertible senior notes due 2028, with a 0.625% coupon and a 40% conversion premium. The company had said it planned to use the proceeds to fully redeem its $500 million senior secured notes due 2028, expected to be completed on Sept. 26, and to use any balance of the net proceeds “to acquire additional bitcoin and for general corporate purposes.”
The latest move demonstrates how MicroStrategy's balance sheet and financial profile could become stronger as it issues convertible notes to raise proceeds for adding to its bitcoin holdings, according to the investment bank and research firm Benchmark.
Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.
© 2024 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.