MicroStrategy has opted to raise capital through convertible bonds offering for the second time in less than 10 days to further increase its exposure to booming bitcoin.

The software firm said after markets closed on Wednesday that it was offering $500 million in convertible notes due in 2031 to institutional investors. The company had announced a $600 million private offering in convertible notes on March 5.

Its shares dropped 8% on Thursday, after hitting a 24-year high in the previous session. The stock has surged nearly threefold so far in 2024.

Bitcoin hit a fresh record high at $73,803, taking its year-to-date gains to nearly 70%.

The Tysons, Virginia-based firm joined a slew of companies offering convertible bonds in a high interest rate environment.

"MicroStrategy is now single handedly making it clear there is nothing restrictive about the (monetary) policy environment," said Michael O'Rourke, chief market strategist at JonesTrading.

"Since late 2020, the company has come to market with convertible offerings and to a lesser extent at-the-market stock offerings for the specific purpose of investing the proceeds in bitcoin. It appears it is now becoming a weekly event."

Convertible notes, which can be exchanged for shares when the stock hits a predetermined level, offer companies an option to raise capital at lower interest rates than regular bonds without the risk of immediately diluting shareholders like stock offerings do.

MicroStrategy, which began buying and holding bitcoins in 2020, is the largest corporate holder of the cryptocurrency as revenue from its software business eased in 2022 and 2023.

The company bought 15,000 bitcoins since Feb. 15, taking its total holdings to 205,000 as of March 10.

  - Reuters