MicroStrategy Raises $875M In Convertible Notes, Plans Further Bitcoin Purchases

Business intelligence firm MicroStrategy MSTR announced the pricing of its offering of $875 million in convertible senior notes, due in 2028.

What Happened: This offering, expected to close by Sep. 19, 2024, is part of the company's strategy to redeem $500 million in outstanding senior secured notes and to allocate the remaining funds towards purchasing additional Bitcoin.

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According to a press release, the net proceeds from the offering are estimated at $864.1 million, with a potential increase to $997.4 million if an additional purchase option is exercised by the initial buyers.

The notes, which carry a 0.625% interest rate, will be convertible into cash, shares of MicroStrategy's Class A common stock, or a combination of both, providing flexibility to noteholders.

MicroStrategy, under the leadership of Executive Chairman Michael Saylor, began acquiring Bitcoin in 2020, positioning it as a reserve asset within the company's treasury.

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Since then, the firm has grown into the largest corporate holder of Bitcoin, amassing 244,800 BTC, valued at around $14.2 billion at current prices.

Recently, the company revealed a new Bitcoin purchase worth $1.1 billion, leaving $900 million still available from a prior funding round.

The redemption of the $500 million senior secured notes, scheduled for Sep. 26, is contingent on the success of this new convertible notes offering.

The redemption will release approximately 69,080 BTC that were used as collateral, providing further flexibility to the company's balance sheet.

What’s Next: These trends will be discussed at Benzinga's Future of Digital Assets event on Nov. 19, where the role of Bitcoin in institutional portfolios and broader adoption of digital assets will be key points of focus.

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