- MicroStrategy plans to raise $600 million through a private offering of convertible senior notes to primarily purchase additional bitcoin for its corporate treasury.
- The notes will mature in 2030, can be redeemed or converted earlier under certain conditions, and will initially only be offered to qualified institutional buyers.
- MicroStrategy will also use some of the funds for general corporate purposes, demonstrating its continued commitment to acquiring bitcoin.
MicroStrategy, a business intelligence software company, announced plans on March 4, 2024 to raise $600 million through a private offering of convertible senior notes. The company says it will use the funds primarily to purchase additional bitcoin for its corporate treasury.
Details of the Proposed Offering
The notes will be unsecured senior obligations of MicroStrategy with an interest rate and other key terms to be determined. The notes will mature on March 15, 2030 unless repurchased, redeemed, or converted earlier.
MicroStrategy may redeem the notes for cash after March 22, 2027 under certain conditions. Holders can also require the company to repurchase notes on September 15, 2028. The notes will be convertible into cash, shares of MicroStrategy’s Class A common stock, or a combination of both, at the company’s discretion.
The notes will initially only be convertible upon certain events, but after September 15, 2029 can be converted any time until maturity. MicroStrategy intends to grant initial purchasers an option to buy additional notes within 13 days of the initial offering.
Use of Proceeds
MicroStrategy states it will use the net proceeds from the offering primarily to acquire additional bitcoin. The company will also use funds for general corporate purposes.
Offer and Sale of Notes
The notes will only be offered and sold to qualified institutional buyers under Rule 144A of the Securities Act. The offer and sale of the notes have not been registered under the Securities Act or any other jurisdiction.
Conclusion
The proposed $600 million convertible note offering demonstrates MicroStrategy’s continued commitment to acquiring Bitcoin for its corporate treasury. If successful, it would provide the company substantial capital to expand its bitcoin holdings.
