Shares of MicroStrategy Inc. fell Tuesday, as the business analytics software and Bitcoin Play company’s plan to offer convertible debt gave investors a reason to take a breather following the stock’s recent sprint to 24-year highs.
Also weighing on MicroStrategy’s stock MSTR,
bitcoin fell 1.5%, after surging into record territory earlier in the session. This followed a 34% rally in bitcoin BTCUSD,
in the previous six sessions.
MicroStrategy said late Monday that the $600 million in senior notes due 2030 that it plans to offer may be converted into common stock, cash or a combination of both.
The bonds will be part of a private offering, in which only persons deemed to be “qualified institutional buyers” will be able to participate.
“MicroStrategy intends to use the net proceeds from the sale of the notes to acquire additional bitcoin and for general corporate purposes,” the company said.
The stock fell 10.5% in morning trading, after closing Monday at its highest price since March 17, 2000. That puts the stock at risk of suffering its biggest one-day sell-off since it slumped 19.6% on November 9, 2022.
The pullback comes after the stock rose 94.1% during a six-day winning streak, which was the longest winning streak in four months and the biggest six-day gain in three years.
Light: MicroStrategy shares rise 24% and surpass $1,300 for the first time in 24 years as bitcoin soars.
MicroStrategy’s market capitalization has increased by about $11 billion over the past six days, reaching $22.6 billion as of Monday’s close.
The company said in its annual report filed in February that it had $2.21 billion in debt as of Dec. 31.
S&P Global Ratings rates MicroStrategy’s credit at CCC+, or seven steps into speculative, or “junk” grade territory.
The company said the interest rate, conversion price and other elements related to the latest debt offering will be determined at the time of pricing, which is still unknown.
MicroStrategy shares rose 89%, while bitcoin rose 59.5%, the SPDR S&P Software & Services ETF XSW fell 0.9% and the S&P 500 Index SPX gained 6.6 %.