Microstrategy raises recent stock sale to $700M to buy more Bitcoin
American software technology company MicroStrategy has announced the sale of a new $700 million bond in 2032, which it will use to buy more bitcoins.
According to the official press release, the notes will be sold in a private offering to qualified institutional buyers pursuant to Rule 144A of the Securities Act of 1933. The offer is in addition to the $500-million total principal amount previously announced.
The company will use a portion of the proceeds to continue adding more Bitcoin (BTC) to its corporate treasury. According to the latest data presented in its Q1 2024 financial results, Microstrategy earned 214,400 BTC.
Personal offer terms and conditions
The notes, MicroStrategy's unsecured senior obligations, bear interest at 2.25% per annum, payable in arrears on June 15 and December 15 of each year.
RELATED: MicroStrategy Plans $500M Stock Sale to Buy More Bitcoin
The notes will mature on June 15, 2032 “unless earlier purchased, redeemed or converted.”
“Subject to certain conditions, after June 20, 2029, MicroStrategy may redeem all or any of the Notes for cash at a price equal to 100% of the principal amount of the Notes.”
Related: Big shorts are betting $6.9B on MicroStrategy stocks.
Use of income
MicroStrategy estimates that the net proceeds from the sale will be approximately $687.8 million—after deducting first-party buyers' discounts, commissions and estimated expenses.
If the initial purchasers exercise their option to purchase additional notes, the total proceeds may reach $786 million.
“MicroStrategy intends to use the net proceeds from the sale of the Notes to acquire additional Bitcoins and for general corporate purposes.”
Banking on Bitcoin
MicroStrategy's move on June 14 follows the firm's plans to raise $500 million in a similar round on June 13.
The expansion to $700 million continues to align with the Bitcoin-maxi firm's micro-micro strategy to strengthen its BTC holdings and position in the crypto market.
Related: MicroStrategy and Michael Saylor Settle Tax Case for $40M
It is important to note that a sale under Securities Act 144A Act of 1933 means that the notes are not officially registered with the United States Securities and Exchange Commission (SEC).
Notes sold under Rule 144A may not be sold or purchased in the public markets without meeting the SEC's statutory requirements.
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