MicroStrategy has announced plans to offer $500 million in convertible senior notes due in 2032 to qualified institutional buyers. This private offering is aimed at raising funds primarily to purchase additional Bitcoin and for general corporate purposes.
The notes will begin accruing interest from December 15, 2024, and will mature on June 15, 2032, unless they are earlier repurchased, redeemed, or converted according to their terms. The offering will be conducted under Rule 144A of the Securities Act of 1933, targeting qualified institutional buyers within the United States.
The offering will adhere to specific market conditions and other factors, with the interest rate, initial conversion rate, and other terms to be determined at the time of pricing. MicroStrategy will grant the initial purchasers of the notes an option to buy an additional $75 million in notes. The funds raised from this offering will be used to enhance MicroStrategy’s Bitcoin holdings, aligning with the company’s strategy of using Bitcoin as its primary treasury reserve asset. The notes, being unsecured and senior obligations of MicroStrategy, will bear interest payable semi-annually.
The notes and any shares of MicroStrategy’s class A common stock into which they are convertible will not be registered under the Securities and Exchange Commission (SEC), meaning they cannot be sold or bought in public markets without meeting specific legal conditions. This strategy follows the company’s ongoing commitment to investing in Bitcoin and reflects its confidence in cryptocurrency as a valuable asset. The approach also highlights a growing trend among firms to use innovative financial instruments to invest in digital assets, thereby intertwining traditional corporate finance strategies with the burgeoning field of cryptocurrency investments.
