On November 22, Michael Saylor, Executive Chairman of MicroStrategy, announced the successful completion of the company’s offering of convertible senior notes, set to mature on December 1, 2029.
MicroStrategy netted approximately $2.97 billion in proceeds from the sale of the notes after accounting for purchaser discounts. The funds will be used to acquire more Bitcoin and support the company’s general corporate needs, as stated in the press release.
The notes were sold in a private offering over a three-day period, exclusively available to individuals qualified as institutional buyers. These buyers have the option to convert the notes into cash, shares of MicroStrategy’s Class A common stock, or a combination of both.
The initial conversion rate is 1.4872 shares of Class A stock per $1,000 in principal, equating to a value of approximately $672.40 per share. The notes offer a 55% conversion premium over MicroStrategy’s Class A common stock.
The aggregate principal amount was initially set at $2.6 billion, but it increased to $3 billion after issuing an additional $400 million in notes through a greenshoe option. Interestingly, before the sale, the company increased the amount it intended to raise from offering from $1.75 billion to $2.6 billion due to strong demand.
The company clarified that investors can only convert the notes before June 1, 2029, if certain events occur and during specified periods. After that, they can convert the notes at any time until the second scheduled trading day following the maturity date.
This offering follows MicroStrategy’s October 30 announcement of its ambitious “21/21 Plan” to raise $42 billion over three years. The plan aims to secure $21 billion each from equity sales and fixed-income securities to expand Bitcoin reserves. CEO Phong Le highlighted the company’s focus on improving its “BTC Yield,” a key metric measuring Bitcoin holdings relative to diluted shares.
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