MicroStrategy Plans to Raise $700M For Additional Bitcoin Investment And Buyback Debt

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MicroStrategy, a business intelligence and cloud-based services company, announced its plans to sell $700 million in senior convertible notes. 

The firm plans to use proceeds from the sales to redeem $500 million in senior secured notes due in 2028 and the remaining funds to purchase additional Bitcoin. 

Based on its latest acquisition of $1 billion in BTC last week, MicroStrategy holds over $14 billion worth of Bitcoin.

MicroStrategy Intends to Purchase More Bitcoin Tokens Through Convertible Notes Sales

On September 16, MicroStrategy announced via press release its plans to sell $700 million in senior convertible notes. 

According to the announcement, the sales will be a private offering to those who qualify as institutional buyers based on Rule 144A of the Securities Act of 1993.

MicroStrategy further revealed how it will direct the proceeds from the sales of the convertible notes. Firstly, it will use $500 million of generated funds to pay back all its existing 6.125% Senior Secured Notes due in 2028. Then, it will channel the remaining funds into purchasing additional Bitcoin assets.

A portion of the statement reads: “MicroStrategy intends to use the net proceeds from this offering to redeem all $500 million outstanding aggregate principal amount of MicroStrategy’s 6.125% Senior Secured Notes due 2028 (the “Senior Secured Notes”) and to use any balance of the net proceeds to acquire additional bitcoin and for general corporate purposes.“

MicroStrategy mentioned that the offer will rely on market conditions, and the notes will mature by September 15, 2028.

The notes will be unsecured senior obligations of MicroStrategy, a type of debt that runs without collateral. Starting from March 15, 2025, they will attract interest twice a year, on March 15 and September 15.

In addition, the company included options where investors could convert the notes into cash, MicroStrategy’s class A common stock, or a combination of both. However, such conversions must be at the firm’s discretion, and conversion terms are subject to market pricing.

MicroStrategy Remains Bullish on Bitcoin

MicroStrategy has always maintained a bullish stance on Bitcoin. Under the guidance of its Founder and Chairman, Michael Saylor, the company adopted BTC as its primary treasury token.

Michael Saylor, a prominent Bitcoin proponent, took to X to disclose MicroStrategy’s latest BTC acquisition. Between August 6 and September 12, the company purchased 18,300 BTC tokens for $1.11 billion at an average of $60,408 per coin.

MicroStrategy has acquired 18,300 BTC for ~$1.11 billion at ~$60,408 per #bitcoin and has achieved BTC Yield of 4.4% QTD and 17.0% YTD. As of 9/12/2024, we hodl 244,800 $BTC acquired for ~$9.45 billion at ~$38,585 per bitcoin. $MSTR https://t.co/WBBRSKxA1U

— Michael Saylor⚡️ (@saylor) September 13, 2024

The recent acquisition helped the company achieve a BTC Yield of 4.4% QTD and 17.0% YTD.

Founded in 1989, MicroStrategy began its Bitcoin acquisition strategy in 2020. The company now holds over 1% of Bitcoin’s total circulating supply and is the largest institutional holder of BTC.

Saylor revealed that, as of September 12, MicroStrategy holds 244,800 BTC tokens valued at $9.45 billion, acquired at an average of $38,585 per coin. After Saylor’s revelation, MicroStrategy’s stock, MSTR, surged by over 8% on Friday, September 13.