MicroStrategy Secures 101B for Bitcoin Investments

MicroStrategy has successfully concluded a private offering of convertible senior notes worth approximately $1.01 billion, set to mature in 2028. The company intends to use a portion of the proceeds to acquire Bitcoin. Institutional investors were the target audience for this offering, and they have the option to convert the notes into cash or MicroStrategy stock. Additionally, MicroStrategy plans to redeem $500 million in senior secured notes, which will result in the release of 69,080 Bitcoin as collateral. The company’s latest Form 8-K reveals that between September 13 and 19, it made significant progress in this regard. The convertible senior notes carry an annual interest rate of 0.625% and the principal amount will be paid semi-annually on March 15 and September 15. The initial conversion rate is set at 5.4589 shares of class A common stock per $1,000 principal amount of notes, representing a 40% premium over the stock’s price on September 17. MicroStrategy plans to utilize the net proceeds of approximately $997.4 million to fund its Bitcoin acquisition strategy, while the remaining funds will be used for general corporate purposes. It is worth noting that MicroStrategy recently acquired approximately 18,300 BTC worth $1.11 billion, further solidifying its position as a significant holder of Bitcoin.