Key Takeaways
- MicroStrategy plans a $1.75 billion note offering to expand Bitcoin holdings.
- The offering includes an option for initial buyers to purchase an additional $250 million in notes.
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MicroStrategy announced plans to raise $1.75 billion through a private offering of zero-interest convertible senior notes set to mature in December 2029.
MicroStrategy intends to use the net proceeds to acquire additional Bitcoin and for general corporate purposes. The offering will be available to institutional investors and certain non-US buyers.
Convertible senior notes are a type of debt security that investors can later convert into shares of the company’s stock or cash.
This allows investors to benefit from potential stock price growth while receiving downside protection through fixed payments.
In MicroStrategy’s case, the notes will not bear regular interest or increase in principal over time, making them a zero-coupon offering.
Investors will have the option to convert the notes into cash, shares of MicroStrategy’s Class A common stock, or a mix of both.
The Tysons Corner, Virginia-based company will grant initial purchasers an option to buy an additional $250 million in notes within a 3-day period after the initial issuance.
Investors will have limited conversion rights before June 2029, becoming fully convertible thereafter.
The offering is being conducted under Rule 144A of the Securities Act of 1933 for qualified institutional buyers and Regulation S for non-US transactions.
As the notes and related shares of Class A common stock are unregistered under the Securities Act, they cannot be offered or sold in the US without an applicable exemption.
To provide more details, MicroStrategy will host a video webinar on November 19, 2024, at 9:00 a.m. Eastern Standard Time. The session is open to qualified institutional buyers who complete an investor survey required to verify eligibility.
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