Michael Saylor has announced that MicroStrategy successfully raised $3 billion through a convertible senior note offering.
According to the company’s Executive Chairman, the offering carries a 0% coupon rate and a 55% premium, setting the implied strike price at around $672 per share.
$3 Billion Convertible Notes Offering
In an accompanying press release, MicroStrategy explained that the proceeds from the sale will be used to purchase additional Bitcoin and for general corporate purposes. The $3 billion offering consists of convertible senior notes due in 2029. It also includes $400 million in additional notes, purchased through an option exercised by the initial buyers on November 20, 2024.
The notes are unsecured and will not accrue regular interest. They are also convertible into cash, MicroStrategy’s class A common stock, or a combination of both. The starting conversion rate is 1.4872 shares per $1,000 principal, reflecting a 55% premium over the stock’s average price on November 19, 2024.
Further, while they mature on December 1, 2029, MicroStrategy can redeem them as early as December 4, 2026, under certain conditions. Holders can also require the firm to repurchase them on June 1, 2028, or upon the occurrence of specific events.
After all deductions, the net proceeds from the offering amount to approximately $2.97 billion. This latest offering is part of the business intelligence firm’s larger goal of raising $42 billion over the next three years to fund its Bitcoin acquisition strategy, known as the “21/21” plan.
The plan aims to raise $21 billion in equity and $21 billion in fixed-income securities, all of which will increase the company’s Bitcoin holdings.
Microstrategy’s Position
MicroStrategy’s adoption of Bitcoin was initially a hedge against macroeconomic instability, but the company has since committed to aggressively building a reserve based on the cryptocurrency.
Since its shift to the asset in 2020, the software firm has become a leader in the corporate Bitcoin treasury model. According to data from Bitcoin Treasuries, the company currently holds 331,200 coins worth over $32.7 billion, making it the largest publicly-listed holder of BTC.
Its most recent Bitcoin purchases include a massive acquisition of 51,780 BTC worth over $4.5 billion and an earlier purchase of 27,200 BTC valued at more than $2 billion.
On November 19, 2024, MicroStrategy also made headlines, achieving $21.8 billion in trading volume. By doing so, the company surpassed the combined volumes of major tech companies like Apple (AAPL), Amazon (AMZN), and Meta (META).
However, MSTR dumped hard after the news was announced. It dropped by 16% daily from over $530 to under $400 per share.
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