MicroStrategy says it could sell Bitcoin to pay long-term debt obligations
MicroStrategy has hinted that it may sell some of its Bitcoin (BTC) holdings to fund a total of $2.28 billion in long-term debt debt to be paid in principal by 2025. rice field.
According to May 1st filing, MicroStrategy has long-term cash requirements for operating leases, transition taxes, and obligations related to various purchase agreements. The company added:
“$2.4 million semi-annual coupon interest payable on convertible notes in 2025, $15.3 million semi-annual coupon interest payable, plus $2.28 billion aggregate principal at maturity of long-term debt products $100,000 will be paid monthly in principal and interest related to the term of the 2028 secured notes, and other long-term secured debt.”
Business Intelligence Platform said it does not expect cash and equivalents generated by its enterprise analytics software business to be sufficient to meet these debt obligations.
As such, the company said it would consider various options, including borrowing money from BTC and selling some of its holdings.
Other options available to the Company include refinancing its debt, raising cash from other sources such as the issuance and sale of Class A common stock, or settling its obligations in convertible debentures under certain unnamed terms. And so on.
In December 2022, MicroStrategy sold some of its BTC holdings for the first time since it began accumulating. At the time, the company said it sold the assets to gain tax benefits.
Since then, however, the build-up has continued this year. In Q1 he bought 7,500 BTC, pushing his total Bitcoin holdings to 140,000 BTC. This surpasses the bankrupt cryptocurrency exchange Mt. Gox.
Meanwhile, MicroStrategy’s BTC acquisition approach has prompted several traditional financial institutions to purchase their own shares to gain indirect exposure to key digital assets. According to company chairman Michael Thaler, stocks went up A 166% increase since adopting the BTC standard in 2020. This outperforms other assets such as Gold, Nasdaq and S&P 500.
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