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MicroStrategy Increases Convertible Offering to $700 Million to Buy Bitcoin
MicroStrategy has revealed the pricing of its $700 million convertible senior notes offering.
THE announcement It comes a day after the company outlined an initial offering of $500 million, with this latest press release noting an increase in the aggregate principal amount of the notes to $700 million. MicroStrategy expects the offering to close on June 17, 2024.
“The notes will be senior unsecured notes of MicroStrategy and will bear interest at a rate of 2.25% per annum, payable semi-annually in arrears on June 15 and December 15 of each year, commencing on December 15, 2024,” the note reads. Note. the company wrote.
The notes mature on June 15, 2032, unless there is an earlier repurchase, redemption or conversion.
MicroStrategy reveals pricing for its convertible bond offering
According to the company’s statement released on June 14, the conversion rate of the notes is set at 0.4894 shares of MicroStrategy Class A common stock per $1,000 principal amount.
This will equate to approximately $2,043.32 per share and represent a 35% premium to the U.S. composite volume weighted average price (VWAP) of the company’s shares on Thursday, June 13, 2024. That price was $1,513.46.
In its update, MicroStrategy said the $700 million raise offers qualified institutional buyers a chance to raise an additional $100 million. The initial offering on June 13 included an additional $75 million of the aggregate principal amount.
On Thursday, MicroStrategy announced it will redeem $650 million of convertible notes due 2025, with all conversion requests settled in equity. The redemption date is July 15, 2024.
700 million dollars to buy Bitcoin
The company expects a total raise of $687.8 million, or up to $786.0 million should the initial purchasers fully exercise their option to acquire additional securities.
As noted on Thursday, MicroStrategy plans to use the proceeds from the securities offering to purchase additional Bitcoin (BTC). Currently, the company holds 214,400 BTCthe largest by a corporate entity outside of the massive treasury that supports BlackRock’s spot ETF.