According to U.Today, MicroStrategy, a business intelligence firm headed by Michael Saylor, has disclosed the pricing of its latest debt offering. The firm aims to raise $700 million by issuing convertible senior notes due in 2032. The raised funds will be used to buy more Bitcoin and cover general corporate expenses. This decision comes after a previous announcement to raise $500 million, suggesting a possible high investor demand that has enabled MicroStrategy to increase the offering.
The convertible notes will carry an annual interest rate of 2.25%, payable semi-annually on June 15 and December 15, starting from December 15, 2024. The notes will mature on June 15, 2032, unless they are repurchased, redeemed, or converted earlier. After June 20, 2029, MicroStrategy has the option to redeem the notes for cash under certain conditions, provided the company's class A common stock meets specific price thresholds.
Investors will have the choice to convert the notes into cash, shares of MicroStrategy's class A common stock, or a combination of both. The initial conversion rate is approximately 0.4894 MSTR shares per $1,000 principal amount of notes, which translates to an initial conversion price of about $2,043.32 per share. This price signifies a 35% premium over the company's recent stock price.
MicroStrategy anticipates the net proceeds from the offering to be around $687.8 million, or up to $786 million if the initial purchasers exercise their option to buy additional notes. The sale will be conducted privately and only to qualified institutional investors.