MicroStrategy has completed its offering of 0% convertible senior notes. The company states the net proceeds from the offering will be used to purchase more Bitcoin.
On Nov. 22, MicroStrategy’s executive chairman, Michael Saylor, announced that the company has completed its offering of convertible senior notes due for Dec. 1, 2029. The aggregate principal amount was previously announced to be $2.6 billion but it amounted to $3 billion after an additional $400 million worth of notes were issued as a greenshoe option.
MicroStrategy received around $2.97 billion in net proceeds from the notes’ sales, after deducting purchaser discounts. The sales proceeds will be used to buy more Bitcoin(BTC) and to fund the company’s corporate general needs, according to the press release.
The notes were sold during a three-day period in a private offering only available to individuals who were qualified as institutional buyers, in accordance with Rule 144A under the Securities Act of 1933.
$MSTR has completed a $3 billion offering of convertible notes at 0% coupon and 55% premium, with an implied strike price of ~$672. https://t.co/GzO0br0Xfh
— Michael Saylor⚡️ (@saylor) November 21, 2024
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Buyers can convert the notes into cash, shares of MicroStrategy’s class A common stock or a combination of both.
The conversion rate for the notes was initially 1.4872 shares of MicroStrategy’s class A common stock per $1,000 principal amount of notes, which is worth around $672.40 per share. The notes offered hold a 55% conversion premium compared to the MicroStrategy’s class A common stock
Though the company stated that investors can only convert the notes before June 1, 2029 if certain events occur and during certain periods. Afterwards they can do so at any time until the second scheduled trading day following the maturity date.
Prior to the sale, the company announced it was upsizing its convertible senior note offering, from $1.75 billion to $2.6 billion, following high demand for the notes. At the time, the MSTR stock went up by 620% year-to-date and 871% in the past year.
After the surge, the MicroStrategy stock has become the “most traded stock in America.”
Not only that, MicroStrategy also currently holds the title of largest corporate Bitcoin holder. After its latest purchase of 51,780 BTC, the company holds a total of 331,200 BTC or worth more than $32.6 billion following Bitcoin’s recent surge past $99,000.
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