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(Bloomberg) – MicroStrategy Inc. increased the size of a junk-bond sale to fund the purchase of more Bitcoin, on Tuesday selling $ 500 million in notes, the first of its kind in the high-yield market.
The company has received around $ 1.6 billion worth of orders for the offer, including interest from a large number of hedge funds, according to people with knowledge of the marketing process, who asked not to be identified to discuss of a private transaction. The strong interest comes in the midst of a drop in the value of Bitcoin.
The company, led by Michael Saylor, has grown into one of the most bullish public companies when it comes to cryptocurrencies. It has already issued convertible bonds worth around $ 1 billion in its quest to collect more coins, despite this being the first-ever corporate bond sale whose proceeds are affected. to such purchases. Saylors is focusing on Bitcoin, including making it an official business strategy, has aroused the wrath of critics.
MicroStrategy originally planned to issue $ 400 million in debt, and had already seen as many requests when the deal launched on Monday. He sold the guaranteed notes at a yield of 6.125%, according to a person with knowledge of the matter, lower than the initial price talks of 6.25% to 6.5%.
Read more: MicroStrategy sells corporate bonds to buy Bitcoin
Representatives for the company and Jefferies Financial Group Inc., the sole manager of the offering, did not respond to requests for comment.
The Tysons Corner, Va.-Based company said in a filing Monday that it was taking a charge of about $ 284.5 million in its next earnings report due to losses from fluctuations in the price of the digital asset. This represents more than the cumulative profits of the company since 2011.
MicroStrategy had amassed 92,079 Bitcoins as of mid-May, which it said was acquired for around $ 2.25 billion at an average of around $ 24,450 per token.
(Updates with final price.)
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