Key Points
- MicroStrategy has increased its convertible note offering to $875 million for debt redemption and Bitcoin acquisition.
- The business intelligence firm recently purchased an additional 18,300 BTC, increasing its total reserves to about 244,800 BTC.
MicroStrategy, a prominent corporate holder of Bitcoin (BTC), has announced a 25% increase in its convertible senior notes due 2028 offering. This takes the total to $875 million, a significant rise from the initially proposed $700 million.
MicroStrategy’s Bitcoin Acquisition
The firm, renowned for its aggressive Bitcoin acquisition strategy, plans to utilize the net proceeds to redeem all $500 million of its outstanding 6.125% senior secured notes due 2028. The remaining funds will be used for the acquisition of additional Bitcoin and for general corporate purposes. The estimated net proceeds from the offering are around $864.1 million, which could increase to $997.4 million if buyers fully exercise their option to purchase an additional $135 million in notes.
This announcement follows MicroStrategy’s recent acquisition of an additional 18,300 BTC for around $1.11 billion. This purchase has boosted the firm’s total Bitcoin reserves to approximately 244,800 BTC. The total acquisition cost of these reserves is approximately $9.45 billion, with an average purchase price of around $38,585 per BTC.
Details of the Convertible Note Offering
The notes, which carry an interest rate of 0.625% per annum, will be sold to qualified institutional buyers under Rule 144A of the Securities Act of 1933. The notes are due to mature on Sept. 15, 2028. They will be unsecured senior obligations, and holders will have the option to convert them into cash, shares of MicroStrategy’s Class A common stock, or a combination of both.
The offering is anticipated to close on Sept. 19, subject to customary conditions, as noted by MicroStrategy.
