Microstrategy has raised its offering to $2.6 billion to support the purchase of Bitcoin
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MicroStrategy is raising its offering to $2.6 billion to acquire more bitcoins. The giveaway closes on November 21, 2024, with notes maturing on December 1, 2029.
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MicroStrategy's zero-interest convertible senior notes rose to $2.6 billion, compared to $1.75 billion previously announced, according to a Nov. 20 filing. The Company intends to use the net proceeds to fund future Bitcoin purchases and general corporate activities.
Microstrategy expects net proceeds of approximately $2.58 billion from the sale, or $2.97 billion if the original buyers exercise their full option.
As disclosed, the notes, which mature in 2029, will be sold only to qualified institutional buyers and certain non-U.S. persons in compliance with securities law regulations. They will be converted into cash, MicroStrategy Class A common stock, or a combination of both, at the discretion of the Company.
The notes will be unsecured, non-regular interest-bearing senior obligations, and holders may require cash redemption on June 1, 2028 or a micro-strategy upon certain fundamental change events. Beginning on December 4, 2026, MicroStrategy may redeem the notes for cash for Class A common stock under certain price conditions.
The company gave initial buyers an option to purchase up to $400 million of the notes within 3 days of the issuance. The giveaway is expected to close on November 21, 2024.
Issuing convertible senior notes is part of MicroStrategy's ongoing debt financing mechanism for raising bitcoins. The company plans to add about $42 billion worth of bitcoins to its portfolio over the next three years, with $21 billion in equity sales and another $21 billion in fixed-income instruments.
Since adopting the Bitcoin Reserve Strategy in 2020, MicroStrategy has positioned itself as the largest institutional holder of Bitcoin. Total Bitcoin holdings now stand at 331,200 BTC, worth more than $30 billion at current market prices.
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