MicroStrategy to borrow $600 million to buy more bitcoin

(Reuters) - Major bitcoin corporate backer MicroStrategy will borrow $600 million to buy more of the currency, it said on Tuesday, as the cryptocurrency surged past $50,000 in a rally fueled by wider acceptance among investors.

Reuters February 17, 2021 00:07:00 IST
MicroStrategy to borrow $600 million to buy more bitcoin

MicroStrategy to borrow 600 million to buy more bitcoin

(Reuters) - Major bitcoin corporate backer MicroStrategy will borrow $600 million to buy more of the currency, it said on Tuesday, as the cryptocurrency surged past $50,000 in a rally fueled by wider acceptance among investors.

The company, whose Chief Executive Michael Saylor is one of the most vocal proponents of bitcoin, spent last year steadily amassing more of the currency after making its first investment in August as it soared in value.

Bitcoin received its most recent boost when Elon Musk's Tesla Inc bought $1.5 billion of the currency earlier this month. It has also attracted endorsements from business people and celebrities, who have bet it will become an alternative to central-bank issued currencies.

Shares of MicroStrategy, the world's largest publicly traded business intelligence company, rose more than 4% on the news, adding to their meteoric 580% surge in the past year. Bitcoin, which was worth around $7,200 at the start of last year, rose more than 5% to briefly break past the $50,000 mark.

The company already owns close to 72,000 bitcoin, a regulatory filing showed on Feb. 2, valuing its bitcoin holdings at about $3.6 billion, according to a Reuters calculation.

Many cryptocurrencies have struggled to win the trust of mainstream investors and the general public due to their speculative nature and potential for money laundering.

However, major firms such as BNY Mellon, asset manager BlackRock Inc, credit card giant Mastercard Inc and payments companies Square and PayPal, have backed certain cryptocurrencies in recent weeks.

MicroStrategy bought nearly 25,000 bitcoin for $250 million in August last year, the company's foray into the cryptocurrency. Saylor at the time called bitcoin an attractive investment asset, with more long-term appreciation potential than cash.

MicroStrategy said last week that it views its bitcoin coffers as long-term holdings and does not plan to regularly trade in the currency or to hedge or enter into derivative contracts. https://bit.ly/37gpzGw https://bwnews.pr/3s4YwpP

The company said it plans to issue $600 million in convertible notes to fund its bitcoin purchase, after issuing $650 million in notes in December as well to buy the currency.

(Reporting by Noor Zainab Hussain in Bengaluru; Editing by Bernard Orr, Patrick Graham and Saumyadeb Chakrabarty)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

Subscribe to Moneycontrol Pro at ₹499 for the first year. Use code PRO499. Limited period offer. *T&C apply

also read

Thyssenkrupp ends talks with UK's Liberty on steel unit sale
Business

Thyssenkrupp ends talks with UK's Liberty on steel unit sale

By Christoph Steitz, Tom Käckenhoff and Arno Schuetze FRANKFURT (Reuters) - German conglomerate Thyssenkrupp ended talks to sell its steel division to Britain's Liberty Steel due to differences over value, the latest setback in efforts to consolidate the European sector. Liberty Steel, led by commodities tycoon Sanjeev Gupta, last month submitted a firmed-up non-binding bid for Thyssenkrupp's steel unit, Europe's second biggest in terms of sales, which sources said included commitments to protect jobs and sites.

Factbox: Stonks in Washington: Deciphering Reddit's WallStreetBets lingo
Business

Factbox: Stonks in Washington: Deciphering Reddit's WallStreetBets lingo

(Reuters) - Reddit trading lingo may filter in to Washington on Thursday when top hedge fund managers, the head of Robinhood and Roaring Kitty himself are set to give testimony before U.S. House of Representatives lawmakers.

Brent gives up gains after rising above $65 on Texas freeze
Business

Brent gives up gains after rising above $65 on Texas freeze

By Stephanie Kelly NEW YORK (Reuters) - Oil prices steadied on Thursday, with Brent edging back from a 13-month high, after a sharp drop in U.S. crude inventories supported prices, while buying spurred by a cold snap in the largest U.S. energy-producing state petered out.