MicroStrategy Announces $600 Million Convertible Senior Notes Offering to Buy More Bitcoin

MicroStrategy Incorporated (Nasdaq: MSTR), the business intelligence firm that has become known for its significant Bitcoin holdings, announced on March 5, 2024, its intention to offer $600 million in convertible senior notes due 2030. The private offering will be made to qualified institutional buyers under Rule 144A of the Securities Act.

The company also expects to grant an option to the initial purchasers to buy up to an additional $90 million in notes within a 13-day period from the date of issuance. The interest rate, conversion rate, conversion price, and other terms will be determined at the time of pricing.

MicroStrategy plans to use the net proceeds from the sale of the notes primarily to acquire more Bitcoin, further solidifying its position as a major corporate holder of the cryptocurrency. The company has been steadily accumulating Bitcoin since August 2020, when it first announced its decision to adopt the digital asset as its primary treasury reserve.

As of February 2024, MicroStrategy held approximately 143,000 Bitcoins, acquired at an aggregate purchase price of $4.2 billion and an average price of $29,317 per Bitcoin. The company's Bitcoin holdings are a key part of its corporate strategy, which revolves around the continued development of the Bitcoin network through financial markets, advocacy, and technology innovation.

In addition to its Bitcoin acquisition plans, MicroStrategy intends to use a portion of the proceeds for general corporate purposes. The company continues to develop and provide industry-leading AI-powered enterprise analytics software, promoting its vision of "Intelligence Everywhere."

The convertible senior notes will be unsecured, senior obligations of MicroStrategy, bearing interest payable semi-annually in arrears. The notes will mature on March 15, 2030, unless earlier repurchased, redeemed, or converted. MicroStrategy may redeem the notes for cash on or after March 22, 2027, subject to certain conditions.

This announcement comes amid growing interest from institutional investors in Bitcoin and other cryptocurrencies. MicroStrategy's move to offer convertible senior notes to fund its Bitcoin purchases is seen as a vote of confidence in the long-term potential of the digital asset, as well as a reflection of the company's commitment to its Bitcoin-centric treasury strategy.

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