MicroStrategy notes offering to buy Bitcoin take a surprising turn

Gamza Khanzadaev

Unexpected Twist in MicroStrategy’s Notes Offering to Buy Bitcoin Revealed, Along with Intriguing Pricing Details

MicroStrategy, the business intelligence company led by Michael Saylor, has announced the pricing of its latest debt offering. According to a new press release, the company plans to raise $700 million through the issuance of convertible senior notes maturing in 2032, with the aim of purchasing additional Bitcoin and covering overhead costs of the ‘business.

The move follows a previous announcement to raise $500 million, indicating what could be strong investor demand that has allowed MicroStrategy to expand its offering.

The convertible notes will bear interest at a rate of 2.25% per annum, payable semi-annually on June 15 and December 15, beginning on December 15, 2024. They will mature on June 15, 2032, unless repurchased. , refunded or converted early.

MicroStrategy retains the option to redeem the Notes for cash after June 20, 2029, under specified conditions, provided that the Company’s Class A common stock reaches certain price thresholds.

Investors will have the option to convert the notes into cash, shares of MicroStrategy’s Class A common stock, or a combination of both. The initial conversion rate is set at approximately 0.4894 MSTR shares per $1,000 principal amount of Notes, resulting in an initial conversion price of approximately $2,043.32 per share. This price represents a 35% premium to the company’s recent stock price.

MicroStrategy estimates the net proceeds from the offering to be approximately $687.8 million, or up to $786 million if the initial purchasers exercise their option to purchase additional notes. The sale will be carried out privately only to qualified institutional investors.

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Gamza Khanzadaev