🌎 MicroStrategy Raises $700 Million for Bitcoin Investment

MicroStrategy Upsizes Convertible Senior Notes Offering to $700 Million

MicroStrategy has announced the pricing of its convertible senior notes offering, increasing the total to $700 million. This follows an initial announcement of a $500 million offering. The company expects to close the offering on June 17, 2024.

The notes will be unsecured senior obligations of MicroStrategy, bearing interest at a rate of 2.25% per annum. Interest payments will be made semi-annually in arrears on June 15 and December 15, starting December 15, 2024. The notes are set to mature on June 15, 2032, unless repurchased, redeemed, or converted earlier.

Details of the Convertible Notes

According to the statement released on June 14, the conversion rate for the notes is set at 0.4894 shares of MicroStrategy’s class A common stock per $1,000 principal amount of notes. This equates to approximately $2,043.32 per share, representing a 35% premium over the U.S. composite volume-weighted average price (VWAP) of the company’s stock, which was $1,513.46 on June 13, 2024.

MicroStrategy’s $700 million raise includes an option for qualified institutional buyers to acquire an additional $100 million in notes. The initial offer on June 13 highlighted an additional $75 million of the aggregate principal amount.

Redemption and Bitcoin Purchase

On Thursday, MicroStrategy announced the redemption of $650 million of convertible notes due in 2025, with all conversion requests to be settled in shares. The redemption date is set for July 15, 2024.

The company anticipates raising a total of $687.8 million, potentially up to $786.0 million if initial buyers fully exercise the option to acquire additional notes. The proceeds from this offering are intended to purchase additional Bitcoin (BTC). Currently, MicroStrategy holds 214,400 BTC, the largest amount held by a corporate entity outside of the trove supporting BlackRock’s spot ETF.