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MicroStrategy’s Notes bid to buy Bitcoin sees a surprising twist
Gamza Khanzadaev
Unexpected Twist Revealed in MicroStrategy Notes Offering Bitcoin Purchase, Along with Intriguing Pricing Details
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MicroStrategythe business intelligence company led by Michael Saylor, announced the pricing of its latest debt offering. According to a new press release, the company plans to raise $700 million through the issuance of convertible senior notes due 2032, with the aim of purchasing additional securities Bitcoin and coverage of general business expenses.
This move follows an earlier announcement to raise $500 million, indicating what could be strong investor demand that allowed MicroStrategy to increase the offering.
The convertible notes will have an interest rate of 2.25% per annum, payable semi-annually on June 15 and December 15, starting on December 15, 2024. They will mature on June 15, 2032, unless earlier repurchased, redeemed or converted.
MicroStrategy retains the option to redeem the notes for cash after June 20, 2029, subject to specified terms, provided that the Company’s Class A common stock reaches certain price thresholds.
Investors will have the option to convert the notes into cash, shares of MicroStrategy’s Class A common stock, or a combination of both. The initial conversion rate is set at approximately 0.4894 MSTR shares per $1,000 principal amount of notes, resulting in an initial conversion price of approximately $2,043.32 per share. This price represents a 35% premium to the company’s recent stock price.
MicroStrategy estimates the net proceeds from the offering to be approximately $687.8 million, or up to $786 million if the initial purchasers exercise their option to purchase additional securities. The sale will be conducted privately to qualified institutional investors only.
About the author
Gamza Khanzadaev
Financial analyst, trader and cryptocurrency enthusiast.
Gamza graduated in Finance and Credit with a specialization in securities and financial derivatives. He then obtained a master’s degree in banking and asset management.
He wants to help cover economic and fintech topics, as well as educate more people about cryptocurrencies and blockchain.