MicroStrategy to increase Bitcoin holdings following 500 million fundraising effort
MicroStrategy has unveiled its plan to offer $500 million in convertible senior notes, with the intention of using the proceeds to acquire additional Bitcoin (BTC). The notes are set to mature in 2032.
The company disclosed on Thursday that it aims to provide qualified institutional buyers with the opportunity to purchase unsecured convertible senior notes that will come due in 2032. MicroStrategy emphasized that this private offering would be contingent on market conditions and other relevant factors. The notes will accrue interest payable semi-annually and in arrears on June 15 and December 15 each year until maturity on June 15, 2032, unless they are repurchased, redeemed, or converted as per the terms of the offering.
MicroStrategy also indicated that it could, under certain circumstances, redeem all or a portion of the notes for cash. The company highlighted that holders of the notes will have the option to require MicroStrategy to repurchase all or a portion of their notes for cash on June 15, 2029.
In accordance with the latest announcement, the notes are convertible into cash, shares of the company’s class A common stock, or a combination of both. The reference price used in the calculation of the initial conversion will be the composite volume-weighted average of MicroStrategy’s stock from 9:30 am to 4:00 pm EDT on the pricing date.
If the sale is successful, MicroStrategy intends to utilize the net proceeds to acquire more Bitcoin to supplement the 214,400 BTC the company held as of April 30, 2024. Additionally, the company plans to allocate these funds towards other corporate purposes.
