MicroStrategy Raises $2.97 Billion to Expand Bitcoin Holdings Through Convertible Note Offering

MicroStrategy has successfully completed its offering of 0% convertible senior notes, raising $2.97 billion in net proceeds, which will be used to purchase more Bitcoin.

On November 22, Michael Saylor, executive chairman of MicroStrategy, announced the completion of the company’s offering of convertible senior notes, which are set to mature on December 1, 2029. The initial offering amount was set at $2.6 billion but was increased by $400 million, reaching a total of $3 billion due to the exercise of a greenshoe option.

The proceeds from the sale of the notes, after deducting purchaser discounts, amounted to approximately $2.97 billion. MicroStrategy intends to use these funds for two main purposes: purchasing additional Bitcoin and covering its general corporate needs, according to the company’s press release.

Details of the Convertible Notes Offering

The notes were sold over a three-day period through a private offering, available exclusively to institutional buyers as per Rule 144A under the Securities Act of 1933. The offering’s conversion terms allow buyers to convert the notes into cash, shares of MicroStrategy’s Class A common stock, or a combination of both.

The conversion rate for the notes was initially set at 1.4872 shares of MicroStrategy’s Class A common stock for each $1,000 principal amount, which is equivalent to approximately $672.40 per share. The notes come with a 55% conversion premium relative to the current price of MicroStrategy’s Class A common stock.

Investors can only convert the notes before June 1, 2029, if specific events occur or during designated periods. After this date, conversions will be allowed at any time until two trading days following the maturity date.

A Surge in Demand and Stock Performance

The company had originally announced a $1.75 billion offering, but due to strong investor demand, it upsized the offering to $2.6 billion. This surge in demand follows the significant rise in MicroStrategy’s stock, which has soared by 620% year-to-date and 871% over the past year. The company’s stock has become the “most traded stock in America,” reflecting its growing prominence in the market.

MicroStrategy’s Bitcoin Strategy

MicroStrategy continues to strengthen its position as the largest corporate holder of Bitcoin. Following its most recent purchase of 51,780 BTC, the company now holds a total of 331,200 BTC, valued at over $32.6 billion based on Bitcoin’s recent surge past $99,000.

MicroStrategy’s aggressive strategy of accumulating Bitcoin has placed the company at the forefront of the crypto investment space, as it continues to capitalize on Bitcoin’s growth and establish itself as a major player in the digital asset market.