MicroStrategy has completed its offering of 0.625% convertible senior notes due 2028, raising approximately $1.01 billion.
Convertible Notes Offering
These unsecured senior notes were offered only to qualified institutional buyers, carrying an annual interest rate of 0.625% payable semi-annually and maturity dated September 15, 2028. The initial conversion price is set at $183.19 per share, equating to 5.4589 shares of MicroStrategy's Class A common stock per $1,000 principal amount of the notes.
Corporate Bitcoin Holdings Soar
Under Michael Saylor's leadership, MicroStrategy has become the largest corporate holder of Bitcoin since it began acquisitions in 2020. By the end of 2023, the company held 190,000 Bitcoins. As of the close of trading on September 19, 2024, the number rose to approximately 244,800 Bitcoins, valued at around $9.45 billion, acquired at an average price of $38,585 per Bitcoin.
Plans for Fund Usage
The company intends to use approximately $997.4 million of the net proceeds to redeem its existing $500 million in 6.125% Senior Secured Notes and to acquire additional Bitcoins, which will release approximately 69,080 Bitcoins currently securing such senior notes. Note holders have the right to require repurchase on September 15, 2027, or upon a fundamental change, at a price equal to 100% of the principal amount plus accrued and unpaid interest.
Raising funds through the convertible notes offering emphasizes MicroStrategy's strategic intent to continue substantial investments in Bitcoin and manage financial obligations to further the company's growth.
Comments