MicroStrategy Announces $500M Convertible Notes Offering to Expand Bitcoin Holdings

By: Isha Das

MicroStrategy has revealed plans to issue $500 million in convertible senior notes by 2032, marking another significant step in its aggressive Bitcoin investment strategy.

This new offering, aimed at qualified institutional buyers, highlights the company’s sustained commitment to bolstering its cryptocurrency reserves, especially amidst the current volatile market climate. As of mid-June, MicroStrategy holds over 214,400 BTC, which constitutes more than 1% of Bitcoin’s total circulating supply and is valued at roughly $15 billion.

In the official statement, MicroStrategy detailed the offer, providing initial purchasers with an option to acquire an additional $75 million in notes within 13 days post-issuance. These convertible senior notes, maturing on June 15, 2032, will be unsecured with interest payable semi-annually. The first interest payment is slated for December 15, 2024. Additionally, the firm retains the right to redeem the notes for cash, either wholly or in parts, starting from June 29, 2029, subject to certain conditions that allow for financial management flexibility.

Investors will have the option to convert these notes into cash, MicroStrategy’s Class A common stock, or a combination of both, thereby offering a versatile investment aligned with the company’s growth strategy. The specific terms of conversion, including rates and prices, will be finalized at the pricing of the offering.

It’s important to note that both the offering itself and any potentially convertible shares of MicroStrategy’s class A common stock will not be registered under the Securities Act or state securities laws. Thus, these financial instruments cannot be offered or sold in the United States without proper registration or an applicable exemption. MicroStrategy intends to allocate the proceeds from this offering to expand its Bitcoin holdings further and address general corporate purposes, in harmony with Chairman Michael Saylor’s staunch advocacy for Bitcoin.

This bold move reaffirms MicroStrategy’s position as the largest corporate holder of Bitcoin. The company already holds a significant percentage of the Bitcoin market, reflecting a long-term perspective on digital assets as a fundamental part of its corporate strategy.