MicroStrategy Convertible Senior Notes Worth $700 Million Offered at 2.25% Interest

Key Points:

• MicroStrategy increases convertible note offerings from $500 million to $700 million.
• MicroStrategy convertible senior notes will convert into MicroStrategy stock at a 35% premium.
• The offering, targeted at qualified institutional buyers, signals MicroStrategy’s ongoing commitment to Bitcoin.

MicroStrategy, a prominent player in the cryptocurrency market, has finalized the pricing of its latest financial manoeuvre: a $700 million offering of 2.25% convertible senior notes due in 2032.

MicroStrategy Convertible Senior Notes Raised to $700 Million

Originally planned at $500 million, the offering has been upsized to meet investor demand. MicroStrategy convertible senior notes are set to be sold privately under Rule 144A to qualified institutional buyers, with an option for purchasers to acquire an additional $100 million within 13 days of issuance. The closing date for this transaction is expected to be June 17, 2024, contingent upon customary closing conditions.

Each $1,000 principal amount of MicroStrategy convertible senior notes will initially convert into approximately 0.4894 shares of the company’s class A common stock, valued at approximately $2,043.32 per share—a 35% premium over the U.S. composite volume weighted average price of the stock, as per company disclosures.

Move Reflects Firm Commitment to Bitcoin Investment Strategy

The anticipated net proceeds from the offering are projected to be around $687.8 million. MicroStrategy plans to allocate these funds toward expanding its Bitcoin holdings in addition to general corporate uses. Currently, the firm holds a significant stash of 214,400 Bitcoins.

MicroStrategy’s move underscores strong confidence in the king cryptocurrency, strengthening its position as a torchbearer for institutional adoption of cryptocurrencies. In seeking large funds through convertible notes, MicroStrategy not only roots itself deeply in the crypto market but sets precedence for other enterprises that are looking to make strategic investments in digital assets.