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MicroStrategy set to buy more Bitcoin, to raise $500m via convertible notes

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on Mar 13, 2024
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  • The strategic move underlines MicroStrategy's continued investment in Bitcoin.
  • The company will raise $500 million by offering convertible senior notes due 2031.
  • MicroStrategy has also outlined conditions under which it may redeem the notes, starting from March 22, 2028.

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MicroStrategy® Incorporated (Nasdaq: MSTR) on Wednesday said it will raise $500 million by offering convertible senior notes due 2031 in a private sale targeted at qualified institutional buyers, as per Rule 144A of the Securities Act of 1933.

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The strategic move underlines MicroStrategy’s continued investment in Bitcoin, reinforcing its bullish outlook on the cryptocurrency.

MicroStrategy bid to increase Bitcoin holdings

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Amid fluctuating market conditions, MicroStrategy’s bold initiative to secure additional funds through a private offering shows the company’s commitment to increasing its Bitcoin holdings.

By leveraging the growing interest among institutional investors in cryptocurrency as an asset class, MicroStrategy aims to strengthen its position in the digital currency space.

Convertible senior notes aimed at institutional buyers

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The proposed offering involves convertible senior notes, which are unsecured and rank senior in MicroStrategy’s obligation hierarchy.

These financial instruments are designed to attract sophisticated institutional investors looking for viable entry points into the cryptocurrency market indirectly through established firms like MicroStrategy.

Interest payments and redemption details outlined

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Investors holding the convertible senior notes can expect semi-annual interest payments starting September 15, 2024, with the notes reaching maturity on March 15, 2031.

MicroStrategy has also outlined conditions under which it may redeem the notes, starting from March 22, 2028, offering a degree of flexibility and assurance to potential investors regarding the company’s long-term strategy.

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