Zinger Key Points
- The company will settle all conversion requests by issuing shares of its Class A common stock, plus cash for fractional shares.
- MicroStrategy has amassed 461,000 BTC and has used stock sales and convertible debt to fund bitcoin acquisitions.
- Get the Real Story Behind Every Major Earnings Report
MicroStrategy Incorporated MSTR on Friday announced its plan to redeem its $1.05 billion convertible senior notes due 2027 and settle all conversion requests in shares of its Class A common stock.
The business intelligence and Bitcoin-focused company issued a notice of redemption to the trustee of the outstanding notes, setting Feb. 24, as the redemption date.
The redemption will include the full principal amount of the notes, along with any accrued and unpaid special interest.
Holders of the notes can opt to convert their holdings at a rate of 7.0234 shares of MicroStrategy Class A common stock per $1,000 of principal value, equivalent to a conversion price of $142.38 per share.
In cases of conversion, MicroStrategy has opted to satisfy its obligation entirely in stock, accompanied by cash for any fractional shares.
Holders must submit their conversion requests by Feb. 20 following the procedures outlined in the indenture governing the notes.
MicroStrategy's redemption plan aligns with its broader strategy of aggressively expanding its Bitcoin holdings.
Last week, the company purchased 11,000 BTC for $1.1 billion at an average price of $101,191 per Bitcoin.
This acquisition brought its total Bitcoin holdings to 461,000 BTC, acquired at an aggregate cost of $29.3 billion and an average price of $63,610 per Bitcoin.
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The company has used a combination of stock sales and convertible debt offerings to finance its acquisitions, planning to raise $42 billion through these methods by 2027.
MicroStrategy's Bitcoin-focused strategy has influenced other public companies, including Marathon Digital Holdings, Tesla, Block Inc., and Coinbase to incorporate Bitcoin into their financial strategies.
The expansion of authorized shares would enable MicroStrategy to continue supporting its Bitcoin investment strategy, reinforcing its status as one of the largest corporate holders of the cryptocurrency.
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