MicroStrategy has announced plans to fully redeem its outstanding Convertible Senior Notes starting July 15, 2024, at a price equal to the principal amount plus any accrued interest.
Notably, these notes are due in 2025 and are worth a total of $650 million. The company advised that holders submit their conversion notices by July 11, 2024, to participate in the redemption.
Microstrategy also informed investors that holders of these notes can convert them into shares of its class A common stock. For every $1,000 principal amount of notes, holders can receive approximately 2.5126 shares of MicroStrategy stock, reflecting a conversion price of about $397.99 per share.
Meanwhile, the company also announced plans to conduct a private offering of $500 million in new Convertible Senior Notes due in 2032. This offering, subject to market conditions and regulatory approvals, includes an additional option for initial purchasers to acquire up to an extra $75 million in notes within 13 days.
The newly issued notes will be senior obligations of MicroStrategy and will bear semi-annual interest payments commencing from December 15, 2024, with maturity set for June 15, 2032. Starting from specific conditions in 2029, holders of these notes will have the flexibility to convert them into cash, shares of MicroStrategy stock, or a combination thereof.
The company explained that it intends to use the proceeds from this offering to acquire more Bitcoin and for general business purposes. The specific terms, including interest rates and conversion details, will be finalised at the time of pricing.
Notably, MicroStrategy is known for its strong advocacy for Bitcoin and its financial strategy of accumulating the cryptocurrency as its primary treasury asset.
In a recent development, the company unveiled MicroStrategy Orange, a Bitcoin-based decentralised identity solution for enterprises. The product indicated the company’s strategic shift towards developing software solutions that harness Bitcoin’s capabilities.
The product was introduced during its recent MicroStrategy World conference in Las Vegas. Saylor noted that the product would build on Bitcoin’s attributes, such as fault tolerance, censorship resistance, and advanced cryptography, and enable enterprises to create digital identities while maintaining pseudonymity.
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