Bitcoin
MicroStrategy Raises Convertible Offering to $700 Million to Buy Bitcoin
MicroStrategy has revealed the pricing of its $700 million convertible senior note offering.
O announcement comes a day after the company outlined an initial offering of $500 million, with this latest press release noting an increase to $700 million in the aggregate principal amount of the notes. MicroStrategy expects the offering to close on June 17, 2024.
“The notes will be senior unsecured obligations 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, beginning on December 15, 2024. ,” the company wrote.
The notes mature on June 15, 2032, unless repurchased, redeemed or converted earlier.
MicroStrategy reveals pricing for its convertible note offering
According to the company’s June 14 release, the conversion rate for the notes is set at 0.4894 shares of MicroStrategy Class A common stock per $1,000 principal amount of the notes.
This will be equivalent to approximately $2,043.32 per share and will represent a 35% premium over the U.S. Composite Volume Weighted Average Price (VWAP) of the Company’s shares on Thursday, June 13, 2024. This price was of US$1,513.46.
In its update, MicroStrategy said the $700 million raise gives qualified institutional buyers the option of an additional $100 million. The initial offering on June 13 highlighted an additional $75 million of aggregate principal amount.
On Thursday, MicroStrategy announced it was redeeming $650 million in convertible notes due 2025, with all conversion requests settled in shares. Redemption date is July 15, 2024.
$700 million to buy Bitcoin
The company anticipates a total increase of $687.8 million, or up to $786.0 million if the initial purchasers fully exercise the option to purchase additional notes.
As noted on Thursday, MicroStrategy plans to use proceeds from the note offering to purchase additional Bitcoin (BTC). Currently, the company holds 214,400 BTCthe largest by a corporate entity outside of the massive treasury that underpins BlackRock’s spot ETF.