MicroStrategy Convertible Notes Now Out of Stock With $3B Raised

Key Points:

• MicroStrategy raised $2.97 billion from 0% convertible senior notes due 2029, primarily to acquire more Bitcoin.
• The MicroStrategy convertible notes offering, initially set at $1.75 billion, was increased to $2.6 billion due to high investor interest.

MicroStrategy completed a $3 billion offering of 0% convertible senior notes due 2029 and generated net proceeds of $2.97 billion.

Read more: MicroStrategy Bitcoin Holdings Exceed Nike’s Cash Reserve

Investor Confidence Drives Oversubscription of MicroStrategy Convertible Notes

The company plans to use the money to purchase more Bitcoins, in addition to general corporate purposes, as part of its stated strategy of maintaining Bitcoin as its main treasury reserve asset.

The MicroStrategy convertible notes were issued for a 55% premium over the strike price of circa $672.40 per share of MicroStrategy class A common stock, giving investors the right to convert them into equity. The company could redeem the notes for cash from December 2026 if its stock rises beyond 130% of the conversion price.

The company had initially targeted $1.75 billion but upsized it to $2.6 billion after finding strong interest from institutional investors. MicroStrategy, the first publicly traded company to turn Bitcoin into a treasury reserve asset, currently has over 331,000 Bitcoins in possession, valued at approximately $32 billion.

Ambitious $42 Billion Plan Cements Bitcoin-Centric Strategy

The MicroStrategy convertible notes with 0% do not bear regular interest and are sold at a discount, maturing at face value if the maturity date is not converted. Based on the price of over $98,000 per Bitcoin, the company could buy more than 30,000 coins with the proceeds from the raise.

This is part of ambitious “21/21” plans to raise $42 billion in three years by selling a mix of equity and fixed-income securities to pile more Bitcoin and help investors get indirect exposure to the cryptocurrency. Thanks to these dynamics, MicroStrategy’s stock price is up significantly this year.