MicroStrategy Plans $700 Million Convertible Note Offering

MicroStrategy, a Bitcoin development company, announced on Monday its plan to offer $700 million in convertible senior notes that will mature in 2028.

The company will offer the notes privately to qualified institutional buyers under Rule 144A of the Securities Act of 1933. It may grant initial purchasers an option to buy up to an additional $105 million in notes within 13 days of the initial offering.

“The notes will be unsecured, senior obligations of MicroStrategy and will bear interest payable semi-annually in arrears on March 15 and September 15 of each year, beginning on March 15, 2025. The notes will mature on September 15, 2028, unless earlier repurchased, redeemed or converted in accordance with their terms” it said in a press release.

MicroStrategy Convertible Senior Notes Offering and Redemption Plans

MicroStrategy also offers the option to redeem the notes for cash starting December 20, 2027. If the only part of the notes will be redeemed, at least $75 million must remain outstanding.

Holders can require MicroStrategy to repurchase the notes for cash on September 15, 2027. The notes are convertible to cash, to shares of the company’s Class A common stock, or a combination of both. Before March 15, 2028, however, conversion will only possible under specific conditions. After this date, conversion can occur at any time up to the maturity date.

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

On September 16, MicroStrategy issued a redemption notice for the said Senior Secured Notes, which is set to happen on September 26 this year at 103.063% of the principal amount, plus accrued interest. This redemption is contingent on the completion of the new note offering. Upon redemption, MicroStrategy will release approximately 69,080 Bitcoins securing the Senior Secured Notes.

The new notes will then be sold to institutional buyers and are not registered under the Securities Act or other securities laws. They cannot be offered or sold in the U.S. without registration or an exemption. Interested parties will receive a private offering memorandum detailing the terms.

Social Media Reactions

Michael Saylor (@saylor) on X talked about this move. His post got him a chain of reactions from people mostly in agreement.

MicroStrategy Announces Proposed Private Offering of $700M of Convertible Senior Notes $MSTR https://t.co/OCq7wj2u0P
— Michael Saylor⚡️ (@saylor) September 16, 2024

On a related note, a X user called Sir William of Rotherham wrote that as per previous records, the cycle’s all-time high (ATH) is projected to be reached in 389 days, on October 10, 2025. At that time, the Bitcoin price is expected to reach $341,728, based on the current price of $58,018 multiplied by 5.89.

Gairika holds positions in BTC. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.

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