Today, MicroStrategy® Incorporated (Nasdaq: MSTR), a leading business intelligence firm, has announced in a press release the pricing of its offering of $700 million aggregate principal amount of 2.25% convertible senior notes due 2032. This move is a bold step in the company’s ongoing commitment to Bitcoin, the world’s largest cryptocurrency by market cap.
MicroStrategy Announces Pricing of Offering of Convertible Senior Notes $MSTR https://t.co/ejEbX1a7P9
— Michael Saylor (@saylor) June 14, 2024
The Offering
The notes, initially set at $500 million, were upsized to $700 million. This increase reflects the company’s confidence in Bitcoin as a store of value and its commitment to increasing its digital asset holdings.
The notes will be sold privately to persons reasonably believed to be qualified institutional buyers. MicroStrategy also granted to the initial purchasers of the notes an option to purchase, within 13 days beginning on, and including, the date on which the notes are first issued, up to an additional $100 million aggregate principal amount of the notes.
The notes will be unsecured, senior obligations of MicroStrategy, and will bear interest at a rate of 2.25% per annum, payable semi-annually in arrears on June 15 and December 15 of each year, beginning on December 15, 2024. The notes will mature on June 15, 2032, unless earlier repurchased, redeemed, or converted by their terms.
Conversion and Redemption
Holders of the notes have the option to convert them into cash, shares of MicroStrategy’s class A common stock, or a combination of both. If certain conditions are met, MicroStrategy may redeem the notes for cash starting on or after June 20, 2029. If redeemed, the price will be 100% of the principal amount plus accrued interest. At least $75 million aggregate principal amount of notes must remain outstanding and not subject to redemption.
Strategy
MicroStrategy intends to use the proceeds from this offering to acquire additional Bitcoin. The company has been a prominent advocate for Bitcoin adoption, holding significant amounts of the cryptocurrency on its balance sheet.
The announcement comes amid growing interest in Bitcoin and the broader crypto market. MicroStrategy’s move signals confidence in the long-term potential of Bitcoin as a store of value.
Other companies, like Metaplanet—similar to MSTR in Asia—have also explored convertible notes to fund Bitcoin purchases. MicroStrategy’s previous offering in March 2024 raised $603.75 million in 0.875% convertible senior notes due 2031.
In the crypto industry, this move is seen as a bullish signal. MicroStrategy has been one of the most vocal proponents of Bitcoin, with its CEO, Michael Saylor, often touting the benefits of the digital currency. This latest move further cements the company’s position as a major player in the crypto space.
However, it’s not all smooth sailing. The offering is subject to customary closing conditions and is expected to close on June 17, 2024. This means there are still hurdles to overcome before the deal is finalized.
MicroStrategy’s upsized offering of convertible senior notes is a bold move that underscores the company’s belief in Bitcoin. It’s a significant development that could have far-reaching implications for the crypto market. As the saying goes, “Fortune favors the bold,” and MicroStrategy is proving bold in its approach to Bitcoin.
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