MicroStrategy Could Soon Reveal $3 Billion of Bitcoin Buys With Bond Proceeds.

The crypto world is awaiting a fresh MicroStrategy $MicroStrategy (MSTR.US)$ purchase of bitcoin using proceeds from a $3 billion convertible bond sale that closed on Friday. That deal was boosted in size from $2.6 billion due to strong investor demand.

A filing or press release revealing new bitcoin purchases could come in the next few days.

The company, which is the largest corporate holder of bitcoin with 331,200 coins as of Nov. 17, has been on a bitcoin buying spree during November. It purchased about $6.6 billion of bitcoin from Oct. 31 to Nov. 17 using proceeds from at-the-market equity offerings sold through a group of nine Wall Street firms.

MicroStrategy stock, which ended Friday at $421.88, up 16.2%, has risen sharply since the Nov. 5 election due to the win of crypto-friendly Donald Trump. The stock has nearly doubled since then, while bitcoin is up about 40%.

Bitcoin $Bitcoin (BTC.CC)$ is trading Sunday at about $97,500, down 0.2% in the past 24 hours. Bitcoin fans are talking about a breach of the $100,000 barrier soon.

There is speculation that MicroStrategy, controlled by chairman and bitcoin enthusiast Michael Saylor, will soon reveal new bitcoin purchases. With bitcoin close to $100,000, the company could buy more than 30,000 bitcoin with the $3 billion convertible deal, which had attractive terms for MicroStrategy.

The interest rate was zero, matching the lowest rate on convertible debt this year, and the conversion premium was 55%, among the highest this year.

The company is capitalizing on its surging stock price to sell both equity and debt. MicroStrategy's market capitalization now is about $95 billion using its latest basic share count. Add debt and adjust for the value of a small software business, and the company is valued at about three times the value of its bitcoin holding of about $32 billion. It traded at a small premium of about 20% at the start of 2024.

Saylor has talked about the benefits to MicroStrategy of the equity and debt deals, which allow the company to boost its bitcoin holdings per share. He views the debt deals as bitcoin bonds, effectively offering holders downside protection and upside exposure to bitcoin. The high volatility on its stock also reduces the yield on the convertibles based on the way Wall Street convert arbitragers operate.

The company unveiled last month a "21/21" program to sell $21 billion of debt and $21 billion of equity through 2027 to fund bitcoin buying. It is well on its way to hitting that goal with the recent equity and bond deals.