15 March 2024
The Michael Saylor-led software company MicroStrategy has upsized its planned convertible senior notes offering from $500 million to $525 million.
The company intends to use the proceeds to acquire more Bitcoin, as per their recent press release, following a strategy it has pursued since 2020.
MicroStrategy announced it had priced the 0.875% convertible senior notes due 2031 in a private offering to qualified institutional buyers. The notes will be sold at 100% of the principal amount with an annual interest rate of 0.875%, payable semiannually.
After March 2028, the company can redeem the notes in cash at 100% of the principal plus accrued interest if certain conditions are met. Holders can require MicroStrategy to repurchase the notes at 100% of the principal amount plus interest on September 15, 2028, or upon certain events constituting a fundamental change.
The notes will be convertible into cash, shares of MicroStrategy’s class A common stock, or a combination of both at the company’s discretion.
MicroStrategy estimates the net proceeds of the offering will be approximately $515 million after fees and expenses.
Led by founder and CEO Michael Saylor, MicroStrategy has been aggressive in its bitcoin accumulation strategy. The company now holds more than 200,000 bitcoins worth over $13 billion at press time.
Saylor has said he aims to position MicroStrategy as the world’s first “Bitcoin development company,” though details on the proposal have been scant.
In the past, MicroStrategy has released alpha applications, such as a tool for allowing businesses to reward employees using Bitcoin lightning payments.
As a publicly traded company using its balance sheet to acquire bitcoin at scale, MicroStrategy’s plans illustrate growing corporate interest in Bitcoin as an emerging asset class and treasury asset, one that can hedge against debasement and inflation.