MicroStrategy Announces $700 Million Debt Offering for Bitcoin Purchases

MicroStrategy's New Debt Offering

MicroStrategy, led by Michael Saylor, has unveiled its latest financial strategy, aiming to raise $700 million through a convertible senior notes offering due in 2032. This initiative is primarily designed to fund additional Bitcoin purchases and cover general corporate expenses, highlighting the company's ongoing commitment to cryptocurrency investment.

Details of the Debt Offering

The company previously sought to raise $500 million but increased the target, potentially due to robust investor interest. The notes, bearing a 2.25% annual interest rate, will be payable semi-annually beginning December 15, 2024, and will mature on June 15, 2032, unless handled otherwise through repurchase, redemption, or conversion.

Redemption and Conversion Options

MicroStrategy has the option to redeem these notes for cash after June 20, 2029, contingent upon specific conditions and stock price thresholds. Investors can convert the notes into cash, MicroStrategy’s class A common stock, or a combination, with an initial conversion rate of approximately 0.4894 shares per $1,000 principal. This conversion rate equates to a price of about $2,043.32 per share, marking a 35% premium over recent stock prices.

Financial Impact and Investor Interest

The estimated net proceeds from this offering are around $687.8 million, potentially reaching up to $786 million if initial purchasers opt for additional notes. This private sale targets qualified institutional investors, underscoring the significant demand and interest in MicroStrategy's financial maneuvers and its strategic focus on Bitcoin acquisition.