Strategy, the world’s largest corporate Bitcoin holder, plans to raise $2 billion through zero-interest convertible notes to buy more Bitcoin.
A company statement dated Feb. 18 proposed offering the notes to institutional investors in a private placement, with an additional $300 million option for early buyers. The notes, maturing on March 1, 2030, will be convertible into cash, stock, or a mix of both at Strategy’s discretion.
The notes will not bear regular interest or accrete in value, meaning their principal amount will remain fixed over time. Strategy retains the right to redeem the notes for cash starting March 5, 2027, but only if its stock price trades at least 130% above the conversion price for a specified period.
Meanwhile, investors can demand a repurchase on March 1, 2028, or in the event of a fundamental corporate change, at the principal amount plus any accrued special or additional interest.
The Michael Saylor-led firm, which recently rebranded from MicroStrategy, noted that proceeds would primarily fund more Bitcoin acquisitions while a portion would be allocated as working capital.
MSTR shares barely reacted to the latest announcement, closing down just over 1.1% on Feb. 18 before trading flat after hours. However, the stock remains up 373% over the past year, ranking among the best-performing assets in the U.S. market.
The move aligns with the company’s broader 21/21 Plan, a strategy spearheaded by co-founder Michael Saylor to add $42 billion worth of Bitcoin to its balance sheet by 2027. Strategy has relied heavily on debt offerings to fuel its Bitcoin buying spree, using convertible notes as a key tool to stack sats without diluting existing shareholders.
According to its latest earnings report, where it posted a $670.8 million net loss, Strategy revealed that it has already secured more than $21 billion toward its $42 billion target since launching the 21/21 Plan in late 2023.
The latest raise follows a series of similar debt-funded BTC grabs that helped push its holdings to a staggering 478,740 Bitcoin, according to data from BitcoinTreasuries.
Meanwhile, Strategy has stalled its usual Bitcoin buys, with no new purchases recorded last week as its at-the-market equity program saw zero activity between Feb. 10 and Feb. 14, according to Michael Saylor.
This was only the second time in 14 weeks that Strategy didn’t add to its holdings, mirroring a similar stretch in early February when stock sales temporarily dried up.
Read the full article here