MicroStrategy Secures 1 Trillion KRW Through Convertible Bond Issuance for Bitcoin Investment
Stock Price Fluctuates with Bitcoin Market Price
[Asia Economy New York=Correspondent Baek Jong-min] A situation has occurred where the stock prices of companies that invested in Bitcoin using funds secured by issuing large-scale convertible bonds surged. There is interest in whether this 'debt investment' will lead to successful investment.
According to CNBC on the 24th (local time), MicroStrategy, a software company listed on Nasdaq, announced that it purchased an additional $1 billion (about 1.1 trillion KRW) worth of Bitcoin.
MicroStrategy bought 19,452 Bitcoins last week at an average price of $52,765 (about 58.52 million KRW) per coin, including fees.
The company's Bitcoin holdings have increased to 90,531 coins. The average purchase price is $23,985 (about 26.6 million KRW) per coin.
Compared to the Bitcoin investment amount of $2.17 billion (about 2.4 trillion KRW), the current holding value is approaching $4.5 billion (about 5 trillion KRW), showing significant profits.
However, this recent purchase is currently at a loss. As of the afternoon of the day, the Bitcoin price is forming around the $48,000 range. Due to significant fluctuations in Bitcoin prices this week, it is estimated that a loss of about $4,200 from the purchase price has occurred.
MicroStrategy bought Bitcoin with its own funds in August last year and subsequently issued convertible bonds to purchase additional Bitcoin.
Convertible bond holders can either get their principal back or convert it into MicroStrategy shares if the stock price rises to make a profit. On the other hand, if Bitcoin prices fall, the company may face the risk of having to repay the principal along with a decline in stock price.
Despite these risks, the company's strategy is proving effective. On this day, MicroStrategy's stock price surged by as much as 16% compared to the previous day. The company's stock price had approached $1,000 last week but had plunged to $665 the day before due to the sharp drop in Bitcoin prices this week.
The day before, mobile payment company Square also announced additional Bitcoin purchases in the fourth quarter of last year. Square's stock price was down about 7% on this day.
Electric vehicle company Tesla, which purchased $1.5 billion worth of Bitcoin, showed a strong rise of over 5% on this day after a 13% intraday plunge the day before.
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