MicroStrategy plans to issue eight-year convertible senior unsecured notes amounting to $500 million for “acquiring additional bitcoins and funding general corporate purposes.”
MicroStrategy has raised the target threshold for the bond issuance to $700 million.
MicroStrategy Announces Pricing of Offering of Convertible Senior Notes $MSTR https://t.co/ejEbX1a7P9
— Michael Saylor⚡️ (@saylor) June 14, 2024
The issuance includes an option to place an additional $75 million.
The coupon period is 182 days.
Upon maturity, bondholders may convert them into cash, MicroStrategy class A common shares, or a combination of both.
On June 13, the company also announced the redemption of $650 million in securities maturing in 2025 at 100% of the principal amount plus accrued coupon income. The payment will occur on July 15.
Holders of these bonds can exchange them for MicroStrategy class A shares at a rate of $397.99 per security.
The current issuance will be placed as a private offering for qualified institutional investors, subject to market conditions and other factors.
Previously, MicroStrategy utilized a similar instrument in March 2024, when the company issued two convertible bond offerings of $600 million and $500 million.
The firm holds 214,400 BTC on its balance sheet, valued at approximately $14.56 billion at the current rate. Most recently, MicroStrategy acquired 122 BTC in April 2024.
On March 26, the company’s market capitalization reached a new high since 2000 at $31.85 billion.
On June 7, the value of open short positions on MicroStrategy shares rose to $6.9 billion, tripling over the past six months.