Could Twitter Be the Next Big Company to Add Bitcoin to Its Balance Sheet?
The social media giant Twitter, on Mar 1, announced a $1.25 billion convertible bond offering. Anthony Pompliano now speculates Jack and his team may be preparing to allocate a portion of funds raised to Bitcoin, following MicroStrategyโs route.
Will Twitter Add Bitcoin to their Treasury?
In a tweet, a few hours after Twitterโs announcement, Anthony Pompliano said considering Jack Dorseyโs acknowledgment of BTCโs transformative capabilities; there is no dismissing the decision of Twitter channeling funds to the digital gold and holding BTC in their balance sheet.
https://twitter.com/APompliano/status/1366385269990166534
MicroStrategy issued convertible notes, raising $1.05 billion before proceeding to purchase Bitcoin.
Convertible bond offerings are a cheaper way of raising funds for expansion, easier than conventional bond issuance.
Often, the route is by companies that are bullish on their future growth, but their credit ratings are less-than-stellar. Compared to other tech stocksโsliding as investors unwind their positions due to overvaluation concerns, Twitter is firmer.
Still, their financial position isnโt stopping them from issuing a hybrid debt where purchasers will convert their principal and accrued interest into stocks later.
The Twitter convertible bond offering will be private, open for institutional buyers, and will be unsecured. Interests will be payable semi-annually in arrears.
A portion of funds raised will be used for covering the cost of the convertible note hedge transactions. Additionally, they will use them for general corporate purposes, including โcapital expenditures, working capital, and potential acquisitions.โ
Twitter May Purchase Bitcoin if โVendor or Employee Asks for Payment in BTCโ
It is not clear what company/asset Twitter plans to acquire in the years ahead. However, the crypto community knows that the social media giant has a neutral to bullish view on crypto, especially Bitcoin.
In early February, its Chief Financial Officer (CFO), Ned Segal, said they were considering adding Bitcoin to their balance sheet. If any employee or vendor requests to be paid in BTC, he explains, the tech company will buy Bitcoin as part of its treasury.
โWeโve 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.โ
Square Inc.โs Cash App, according to a BTCManager report, generated $1.63 billion in BTC revenue in Q3 2020, contributing to roughly 80 percent of the mobile payment service platform.