MicroStrategy has revealed plans to offer $500 million in convertible senior notes, aiming to bolster its Bitcoin reserves. This private offering to institutional buyers follows Rule 144A of the Securities Act of 1933, contingent on market conditions.
MicroStrategy plans to use the net proceeds from this sale to purchase additional Bitcoin and for general corporate purposes. This strategy aligns with the company’s long-term goal of using Bitcoin as its primary treasury reserve asset. Despite market uncertainties, MicroStrategy continues to bet heavily on Bitcoin.
The notes, maturing on June 15, 2032, will be unsecured senior obligations with interest payable semi-annually starting December 15, 2024. Additionally, initial purchasers have the option to buy an extra $75 million in notes.
“If fewer than all notes are redeemed, at least $75 million must remain outstanding,” the company specified. The interest rate, initial conversion rate, and other terms will be set at the offering’s pricing.
The offering will be conducted under Rule 144A, meaning the notes and any convertible shares won’t be registered with the SEC. Consequently, they cannot be traded in public markets without meeting specific legal requirements.
MicroStrategy’s CEO, Michael Saylor, remains a staunch advocate of Bitcoin, viewing it as a hedge against inflation and a strategic asset. This latest move underscores the company’s commitment to its Bitcoin-centric financial strategy.
MicroStrategy’s decision to raise $500 million to buy more Bitcoin reflects its unwavering confidence in the cryptocurrency, despite the inherent risks and market volatility. As the company continues to navigate these turbulent waters, all eyes will be on how this bold financial maneuver pans out.