MicroStrategy Announces $500M Convertible Senior Note Offering to Buy More Bitcoin

Business intelligence firm and long-time Bitcoin holder MicroStrategy announced plans to offer $500 million aggregate principal amount of convertible senior notes due 2032.

Interestingly, the proceeds of this initiative will be used to buy more Bitcoin and for other corporate purposes.

According to its official announcement, the NASDAQ-listed company also intends to grant initial buyers of the notes an option to purchase up to an additional $75 million in principal amount of the notes within 13 days starting from the issuance date.

The notes in question will be unsecured senior obligations of the company, accruing interest payable semi-annually on June 15th and December 15th each year, starting from December 15th, 2024.

The notes will mature on June 15th, 2032, unless they are repurchased, redeemed, or converted earlier. From June 20, 2029, MicroStrategy will be able to redeem all or part of the notes for cash, provided that at least $75 million in principal amount of notes remains outstanding and not subject to redemption at the notice date.

Holders can require MicroStrategy to repurchase any portion of their notes for cash on June 15, 2029. Furthermore, the notes can be converted to cash, MicroStrategy class A common stock, or a combination of both at the company’s discretion.

MicroStrategy also said that until December 15, 2031, the notes will be convertible only upon the occurrence of certain events and during certain periods. Following this date, they will be convertible at any time until the second scheduled trading day immediately before the maturity date.

“The interest rate, initial conversion rate, and other terms of the notes will be determined at the time of pricing of the offering. MicroStrategy expects that the reference price used to calculate the initial conversion price for the notes will be the U.S. composite volume weighted average price of MicroStrategy’s class A common stock from 9:30 AM through 4:00 PM EDT on the date of pricing.”