MicroStrategy Ups Convertible Note Offering To $700M To Fuel Bitcoin Acquisitions

MicroStrategy MSTR on Friday announced an increase in its convertible senior notes offering to $700 million, up from the previously planned $500 million.

These notes, due in 2032, will be sold in a private offering to institutional investors under Rule 144A of the Securities Act of 1933, according to the company.

Details Of The Offering

The notes, bearing an interest rate of 2.25% per annum, will be sold to qualified institutional buyers. Interest will be paid semi-annually on June 15 and Dec. 15, beginning Dec. 15, 2024.

The offering, expected to close on June 17, 2024, includes an option for initial purchasers to buy an additional $100 million in notes within 13 days from the issuance date.

MicroStrategy’s CEO, Michael Saylor, emphasized the strategic importance of this offering: “This move aligns with our ongoing commitment to leverage our financial strategies to acquire more Bitcoin and support our corporate growth.”

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Convertible Notes Terms

The notes, convertible into cash, shares of MicroStrategy's class A common stock, or a combination of both, will mature on June 15, 2032, unless earlier redeemed, repurchased, or converted.

From June 20, 2029, MicroStrategy may redeem the notes for cash, provided the stock price exceeds 130% of the conversion price.

The initial conversion rate is set at 0.4894 shares per $1,000 principal amount, equating to a conversion price of approximately $2,043.32 per share, a 35% premium over the June 13, 2024, closing price of $1,513.46.

Usage Of Proceeds

The company anticipates net proceeds of approximately $687.8 million, or $786.0 million if the additional notes are purchased.

MicroStrategy intends to use these funds primarily to acquire more Bitcoin and for general corporate purposes.

Insights into MicroStrategy’s strategies and the broader implications for the digital assets market will be discussed at Benzinga’s Future of Digital Assets event on Nov. 19.

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