MicroStrategy, a publicly traded business intelligence company, announced the completion of its $1.01 billion offering of 0.625% convertible senior notes due in 2028.
The offering, which was announced previously, includes an additional $135 million in notes issued as part of an option granted to the initial purchasers. These notes were sold in a private placement to qualified institutional buyers in accordance with Rule 144A under the Securities Act.
The notes, which are unsecured senior obligations of MicroStrategy, will bear interest at an annual rate of 0.625%, payable semi-annually. They will mature in September 2028, unless earlier redeemed, repurchased, or converted. Notably, the conversion rate for the notes is 5.4589 shares of MicroStrategy class A common stock per $1,000 of notes, reflecting a 40% premium over MicroStrategy’s stock price as of September 17, 2024.
The net proceeds from this sale amount to approximately $997.4 million. MicroStrategy plans to use a portion of the proceeds to fully redeem $500 million of its 6.125% Senior Secured Notes due in 2028, with the remaining funds earmarked for acquiring additional Bitcoin and other general corporate purposes.
This latest financial maneuver strengthens MicroStrategy’s position as a major Bitcoin holder, with the firm securing additional funds to continue expanding its cryptocurrency reserves while addressing outstanding debt.
MicroStrategy holds over 244,800 BTC worth over $15B at current prices. The company is up 63% on its investment, with a profit of more than $6B.
