MicroStrategy has announced its plan to issue $500 million in convertible senior notes set to mature in 2032.
The private offering, targeted at qualified institutional buyers, will be conducted in accordance with Rule 144A of the Securities Act of 1933 and is contingent on market conditions and other variables.
As per the company’s press release, the proceeds from the offering will primarily be utilized for the acquisition of additional Bitcoin (BTC) and for general corporate purposes. This strategic move falls in line with MicroStrategy’s overarching objective of using BTC as its treasury reserve asset.
In terms of the private offering specifics, the firm anticipates giving the initial purchasers of notes the opportunity to acquire an additional $75 million in aggregate principal amount of the notes. The terms of the notes, including the interest rate and initial conversion rate, will be determined at the time of pricing the offering.
Regarding regulatory considerations, the press release states that the notes will be offered and sold to qualified purchasers under Rule 144A of the Securities Act of 1933. This means that the convertible senior notes and any convertible shares of MicroStrategy’s class A common stock will not be formally registered under the Securities and Exchange Commission (SEC). Consequently, they cannot be traded in public markets without meeting specific legal requirements.
The magazine highlights that ‘Bitcoin Layer 2s’ may not truly be L2s and explains the significance of this distinction.