MicroStrategy, a major investor in Bitcoin (BTC), has announced plans to sell $700 million in convertible notes, an increase from the previously announced $600 million. This move comes as the cryptocurrency market continues to experience a bull run.
The details, revealed on March 6, state that the MicroStrategy convertible notes, which will mature in 2030, will carry an annual interest rate of 0.625%. The conversion price is set at $1,497.68 per share, offering a premium of 21% compared to the current trading price of $1,234.48 at the time of publication.
The company explained that holders of the notes have the option to require MicroStrategy to repurchase the notes on September 15, 2028, or in the event of certain fundamental changes. The repurchase price will be equal to 100% of the principal amount of the notes, along with any accrued and unpaid interest.
These notes are exclusively available to accredited or institutional investors. MicroStrategy has the option to redeem the notes for cash after March 22, 2027, if its common stock consistently trades above 30% of the set conversion price.
The sale of the notes is expected to generate $684.3 million in net proceeds for MicroStrategy, or $782.0 million if purchasers exercise their options. The company plans to use these funds to purchase additional Bitcoin or cover corporate expenses.
Currently, MicroStrategy holds 193,000 BTC, which it acquired at an average price of $31,544. This represents a balance of $12.9 billion and a return of 112% since the initial investment. The company’s stock has also experienced significant growth, returning 429.2% as part of the broader Bitcoin bull market.
Michael Saylor, chairman and co-founder of MicroStrategy, is a passionate advocate of Bitcoin. He first incorporated the digital asset into the company’s corporate asset allocation strategy in August 2020. Since then, MicroStrategy has consistently added BTC to its corporate treasury every quarter. During a panel discussion at the Bitcoin Atlantis conference on March 1, Saylor expressed his belief that AI and exchange-traded funds would lead to a decade-long “gold rush” for Bitcoin.