MicroStrategy Plans $500 Million Note Offering to Invest Further in Bitcoin

• MicroStrategy plans to offer $500M in convertible notes, with an additional $75M option for initial buyers.
• Proceeds will be used to acquire more Bitcoin and for general corporate purposes, reflecting ongoing BTC strategy.
• Notes mature on June 15, 2032, and are convertible into cash or MicroStrategy stock at the company’s discretion.

MicroStrategy has announced plans to offer $500 million in convertible senior notes due 2032 in a private offering, targeting qualified institutional buyers under Rule 144A of the Securities Act of 1933. This offering, subject to market conditions and other factors, includes an option for the initial purchasers to buy an additional $75 million of the notes within 13 days from the issuance date.

Michael Saylor, CEO of MicroStrategy, announced via an X post that the company will redeem $650 million of 2025 convertible notes and settle all conversion requests in shares of $MSTR.

The notes will be unsecured and senior obligations of MicroStrategy, with interest payable semi-annually in arrears on June 15 and December 15, starting December 15, 2024. Maturing on June 15, 2032, the notes can be redeemed for cash by MicroStrategy on or after June 20, 2029, under specific conditions. Holders can also opt to require MicroStrategy to repurchase the notes on June 15, 2029. The notes are convertible into cash, MicroStrategy’s class A common stock, or a combination of both, at the company’s discretion. 

MicroStrategy intends to use the net proceeds from this offering to acquire additional Bitcoin and for general corporate purposes. The interest rate, initial conversion rate, and other terms will be determined at the time of pricing, with the reference price based on the U.S. composite volume weighted average price of MicroStrategy’s class A common stock on the pricing date.

The offering is strictly private, adhering to Rule 144A, and the notes, along with any class A common stock issued upon conversion, are not registered under the Securities Act or any other jurisdiction’s securities laws. Therefore, these securities cannot be sold or offered in the United States without proper registration or an applicable exemption.

MicroStrategy’s strategy of leveraging debt financing to expand its Bitcoin holdings has been evident since 2020. The company recently proposed a $600 million convertible note offering in March, subsequently using $623 million in cash to purchase 9,245 BTC. As of now, MicroStrategy holds 214,400 BTC, valued at $14.5 billion at current prices, reflecting a significant investment in the cryptocurrency.