Twitter has recently announced a $1.25 billion convertible bonds offering, a move seen as a step to bring Bitcoin into their balance sheet. Responding to the announcement, the crypto community is speculating that the social media platform might allocate a portion of funds raised to Bitcoin investment, following MicroStrategy’s route.
Twitter to offer Convertible Bonds
Twitter’s announcement of raising $1.25 billion by selling convertible senior notes has created a bullish outlook on Bitcoin. Some of the crypto influencers are endorsing that Jack Dorsey might be following MicroStrategy and getting Bitcoin on Twitter’s balance sheet.
Twitter just announced a $1.25 billion convertible note offering.
Given the recent treasury strategy of Microstrategy, could @jack be planning to put bitcoin on Twitter's balance sheet?
Time will tell, but there are few people who understand the power of bitcoin like Jack.
— Pomp 🌪 (@APompliano) March 1, 2021
The sale of the convertible senior notes is due for a 2026 expiry to accredited investors. The social media platform added that it would offer an additional $187.5 million aggregate principal amount of the notes to initial purchasers.
Just after Tesla’s announcement of purchasing $1.5 billion of the cryptocurrency in its balance sheets, Ned Segal, the Chief Financial Officer at Twitter, said they were considering adding Bitcoin to their balance sheet. He also added on paying its Twitter employees and vendors in Bitcoin:
“We’ve done a lot of the upfront thinking to consider how we might pay employees should they ask to be paid in bitcoin, how we might pay a vendor if they asked to be paid in bitcoin, and whether we need to have bitcoin on our balance sheet should that happen.”
Twitter Might Pull MicroStrategy’s Bitcoin Investment Route
MicroStrategy has already raised twice from investors via convertible notes to buy the world’s biggest cryptocurrency. The public-traded business intelligence firm recently announced a similar treasury strategy on February 16 to raise capital $600 million funds to buy bitcoin.
The press release did point out that some of the net proceeds from selling the notes will be used to pay the costs of note hedge transactions. While the rest will be used for payouts on the maturity of Twitter’s 1% convertible senior notes due in 2021 and for general corporate purposes, including capital expenditures, working capital, and potential acquisitions.
Thus, it appears that there might be a chance that the microblogging platform might get some Bitcoin on its balance sheet after all.