MicroStrategy has increased its planned offering of convertible senior notes from $500 million to $525 million. The company aims to use the proceeds from this offering to purchase additional Bitcoin, continuing a strategy initiated in 2020.
The company has successfully priced the convertible senior notes, which are due in 2031, at an annual interest rate of 0.875%, payable every six months. These notes have been offered in a private sale to qualified institutional buyers and are set to be sold at their full principal value.
After March 2028, MicroStrategy has the option to redeem the notes for cash at their full principal value plus any accrued interest, provided certain conditions are met.
Additionally, under specific circumstances, note holders have the right to require MicroStrategy to repurchase the notes at their full principal value plus interest by September 15th, 2028.
The notes can be converted into cash, MicroStrategy's class A common stock, or a combination of both, at the discretion of the company. The expected net proceeds from the offering are estimated to be around $515 million, after accounting for fees and expenses.
MicroStrategy has adopted a notable strategy of accumulating Bitcoin, with its holdings surpassing 200,000 Bitcoin, valued at over $13 billion at the current market rates.
Founder and Chairman Michael Saylor has expressed intentions to establish MicroStrategy as a pioneering "Bitcoin development company," though further details on this vision remain limited.
The company has previously launched alpha applications, such as a tool enabling businesses to make Bitcoin lightning payments to employees.
MicroStrategy's significant investment in Bitcoin underscores a growing interest among corporations in Bitcoin as a potential asset class and treasury asset, seen as a hedge against currency debasement and inflation.