MicroStrategy has unveiled plans to raise $500 million through the issuance of convertible senior notes, with the intention of using the proceeds to acquire additional Bitcoin (BTC). These notes are set to mature in 2032.
The tech company aims to offer qualified institutional buyers the opportunity to purchase unsecured convertible senior notes that are due in 2032. The terms of the private offering, including the interest payable semi-annually every June 15 and December 15, are subject to market conditions and other factors.
The notes will run until maturity on June 15, 2032, unless they are repurchased, redeemed, or converted in accordance with the offering’s terms. MicroStrategy also has the option to redeem some or all of the notes for cash.
Holders of the notes will have the right to require MicroStrategy to repurchase all or a portion of their notes for cash on June 15, 2029. The company highlighted that the proceeds from the offering will be used to purchase more Bitcoin.
The notes are convertible into cash, shares of MicroStrategy’s class A common stock, or a combination of the two. The initial conversion calculation will be based on 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 use the net proceeds to add to the 214,400 BTC it held as of April 30, 2024, as well as for other corporate purposes.