MicroStrategy announced plans to offer $600 million in convertible senior notes due 2030 to fund further acquisitions of Bitcoin after its stock price surged 20% in the early hours of trading on March 4.
The private offering is aimed at qualified institutional buyers and is subject to market conditions and other factors. The move aims to secure additional funds for the company’s future endeavors amid fluctuating market conditions.
MicroStrategy’s stock has climbed an impressive 461.8% over the past 12 months as Bitcoin recovered from its bear market lows.
MSTR was trading at $1334.01 as of press time, up 23.59% over 24 hours after Bitcoin resumed its approach to all-time high levels following a weekend of consolidation.
Offering details
According to the filing, the company is set to provide initial purchasers with an option to acquire an additional $90 million in notes within a 13-day window from the issuance date, potentially elevating the total to $690 million.
These convertible senior notes, maturing on March 15, 2030, will be unsecured and rank senior in MicroStrategy’s obligations hierarchy. Interest on the notes will be payable semi-annually, with the first payment due on Sept. 15, 2024.
MicroStrategy reserves the right to redeem the notes for cash in whole or in part after March 22, 2027, under specific conditions, ensuring flexibility in financial management.
The notes are convertible into cash, MicroStrategy’s class A common stock, or a combination of both to offer investors a versatile financial instrument that aligns with the company’s growth and investment strategy.
The conversion terms, including the rate and price, will be finalized upon the offering’s pricing.
It’s important to note that the offering and any subsequent conversion shares of MicroStrategy’s class A common stock will not be registered under the Securities Act or any state securities laws. Therefore, they may not be offered or sold in the US absent registration or an applicable exemption from registration requirements.
Saylor’s conviction in Bitcoin
According to the filing, MicroStrategy will use the proceeds to bolster its investment in Bitcoin while addressing general corporate purposes in line with Chair Michael Saylor’s recent statements about the flagship crypto.
As of March 4, MicroStrategy holds roughly 193,000 BTC purchased at an average price of $31,554 for a total cost of $6.1 billion. The holdings are worth over $13 billion as of press time — with Bitcoin trading at $68,039.
The initiative to channel the net proceeds into Bitcoin acquisition reflects MicroStrategy’s confidence in the digital currency as a viable asset for corporate investment. Saylor recently said that he would continue to hold Bitcoin and has no plans to sell now or at any point in the future.
He said during interviews and podcasts over the past week that:
“Bitcoin is the exit strategy.”
Saylor also said that Bitcoin represents the “digital transformation of capital” and offers unprecedented opportunities for capital preservation and appreciation.
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