MicroStrategy buys an additional $786 million worth of BTC after convertible note sale.

The recent acquisition, valued at $786 million, was funded through the company's recent convertible debt offering, which raised $800 million upon closing on June 18. Each Bitcoin was acquired at an average price of $65,883.

This marks another successful debt offering from MicroStrategy, with investors accepting a minimum annual yield of 2.25% on the company's convertible bonds. Alternatively, investors have the option to convert their investments into MSTR stock at a rate of $2,043.32 per share, approximately 35% above its current market price, if the stock's value exceeds this figure before the bonds expire on June 15, 2032.

This effectively provides bond investors with a call option on MSTR stock, with the assurance of getting their money back plus a small yield if the investment does not perform well.

Earlier this month, MicroStrategy announced a notice of redemption for its first round of convertible bonds issued in December 2020. Given MSTR’s significant rise above the predetermined conversion rate of $397.77 per share, it is expected that investors will convert their shares before July 11, potentially causing major dilution for MSTR shares.

In recent years, the price of MSTR has largely been influenced by the price of Bitcoin.

MicroStrategy executive chairman Michael Saylor has described the company as a Bitcoin ETF with perks, such as the use of modest leverage and no management fees. Critics, however, argue that the company is overvalued compared to typical Bitcoin ETFs, with a $26 billion market cap almost double the size of its Bitcoin AUM.

Recently, other companies, including Japanese public firm MetaPlanet, have started to emulate MicroStrategy, leveraging capital markets to purchase more Bitcoin (BTC).