MicroStrategy has said that it plans to purchase further Bitcoin with the money raised.
Interest on these notes is due semi-annually, with the first payment due in December 2024.
The Michael Saylor-led MicroStrategy is re-increasing its wagers on the crypto industry in the hopes of expanding its Bitcoin holdings. The company just announced that it would be issuing convertible senior notes with a face value of $500 million. Importantly, MicroStrategy has said that it plans to purchase further Bitcoin with the money, among other things.
At the same time, MicroStrategy has previously used this strategy to enhance its Bitcoin holdings by issuing senior notes. The well-known Bitcoin accumulation technique of MicroStrategy has now launched a private issuance of convertible senior notes for $500 million. These notes are targeted at institutional purchasers and are due in 2032, according to the statement.
Banking on Bitcoin
In keeping with its continuing policy of using debt to increase its cryptocurrency holdings, the corporation plans to utilize the funds mostly to buy more Bitcoin. At the same time, there is no collateral supporting the convertible senior notes, notwithstanding their senior status and unsecured nature.
Interest on these notes is due semi-annually, with the first payment due in December 2024, as mentioned in the announcement. Except in the event of an early conversion, redemption, or buyback, they will mature in June 2032. To be clear, MicroStrategy has the option to redeem all or part of the notes as long as there is a total principal balance of $75 million as of June 2029.
It’s important to mention that traders also have freedom with the notes’ conversion terms. One may exchange them for cash, another for shares of class A common stock in MicroStrategy, or a combination of the two. But one can’t convert them until December 2031; they’ll be freely convertible just before maturity.
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