MicroStrategy said Friday that it’s taking measures to manage $1.05 billion in corporate debt that appears to be tied to the initial stages of its Bitcoin buying scheme.

Under the leadership of co-founder and Executive Chairman Michael Saylor, the company has accumulated a stash of 461,000 Bitcoin worth nearly $49 billion, emerging as the largest corporate holder of Bitcoin since purchasing the asset for the first time in August 2020. And it’s still buying, adding $1 billion to the pile earlier this week.

In an effort to buy more Bitcoin than it could otherwise afford, the company has issued so-called convertible notes. It’s a form of company debt that can later be converted into shares, allowing MicroStrategy to attain leverage through borrowed capital poured into Bitcoin.

While the company issued billions of dollars in convertible notes last year, MicroStrategy first announced that it had completed such an offering in February 2021. R

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Author: André Beganski