$800M Notes Offering for Bitcoin

• MicroStrategy raises $800M via convertible notes to expand Bitcoin holdings, acquiring 11,931 BTC at $36,798 each.
• Convertible notes mature in 2032 with a 2.25% interest rate, offering conversion to cash or stock at $2,043.32 a share.
• The financing move aligns with MicroStrategy’s strategy to boost liquidity and strengthen its Bitcoin treasury.

MicroStrategy closed an $800 million offering of convertible senior notes to qualified institutional buyers. The notes, maturing in 2032, carry a 2.25% annual interest rate and are payable semi-annually starting December 15, 2024. 

MicroStrategy exercised an option to issue an additional $100 million in notes, which were fully purchased by initial buyers. This transaction aligns with the company’s strategy to strengthen its financial position and fund further investments.

In the most recent update, Michael Saylor announced that MicroStrategy acquired an additional 11,931 bitcoins for approximately $786.0 million. The company used proceeds from the convertible notes and existing cash, paying an average of $65,883 per bitcoin. This purchase brings MicroStrategy’s total bitcoin holdings to 226,331, acquired for about $8.33 billion at an average of $36,798 per bitcoin.

The net proceeds of approximately $786 million will primarily be used to increase MicroStrategy’s bitcoin reserves and for general corporate purposes.

The convertible notes offer investors to convert them into cash, MicroStrategy’s class A common stock, or a combination of both. The initial conversion rate is 0.4894 shares per $1,000 of notes, equivalent to an initial conversion price of about $2,043.32 per share. This price represents a premium of approximately 35% over the average trading price of MicroStrategy’s stock prior to the offer announcement.

Investors can convert these notes under certain conditions, including corporate events, or after June 20, 2029. MicroStrategy may redeem the notes starting June 20, 2029, at 100% of their principal amount plus accrued interest, contingent upon the company’s stock performance relative to specific benchmarks.

MicroStrategy’s focus on Bitcoin is a core element of its business strategy. The company views Bitcoin as both a reserve asset and also as a way to create long-term value through financial activities and new technologies. Its continued effort to use cash flows and financing to buy more Bitcoin highlights its unique role in the evolving digital asset world.

In accordance with securities regulations, these notes and any associated shares of MicroStrategy’s stock have been offered through a private placement, exempt from registration under the Securities Act of 1933. This approach limits their availability for purchase within the United States, absent specific exemptions or registrations.

MicroStrategy continues to position itself at the intersection of financial innovation and technology, leveraging its software development capabilities to advance enterprise analytics and blockchain applications. The company’s recent financial moves reflect a deliberate attempt to enhance liquidity, expand Bitcoin holdings, and drive growth across its operational domains.