FameEX Hot Topics | MicroStrategy Announces $500M Stock Sale to Buy More Bitcoin

MicroStrategy plans to conduct a $500 million stock sale to acquire more Bitcoin, reinforcing its dedication to BTC as a treasury reserve asset. MicroStrategy has announced it will offer $500 million in convertible senior notes due in 2032. This private offering, aimed at qualified institutional buyers, will follow Rule 144A of the Securities Act 1933 and is subject to market conditions and other factors.

These notes will be unsecured, senior obligations of MicroStrategy and will bear interest payable semi-annually in arrears on June 15 and December 15 each year, beginning on December 15, 2024. They will mature on June 15, 2032, unless repurchased, redeemed, or converted earlier according to their terms. Despite the market condition dependencies, this move aligns with MicroStrategy’s long-term goal of using BTC as its treasury reserve asset.

The firm also plans to grant initial purchasers the option to buy an additional $75 million in aggregate principal amount of the notes. If MicroStrategy redeems fewer than all the outstanding notes, at least $75 million aggregate principal amount of notes must remain outstanding and not subject to redemption as of the relevant redemption notice date.

The press release stated that the interest rate, initial conversion rate, and other terms of the notes will be determined at the time of pricing of the offering. MicroStrategy expects the reference price used to calculate the initial conversion price for the notes will be the U.S. composite volume-weighted average price of MicroStrategy’s class A common stock from 9:30 am through 4:00 pm EDT on the date of pricing.

According to the press release, the notes would be offered and sold to qualified purchasers under Rule 144A of the Securities Act 1933. This means the convertible senior notes and any convertible shares of MicroStrategy’s class A common stock will not be registered with the Securities and Exchange Commission (SEC). Consequently, they cannot be sold or bought in public markets without meeting specific legal conditions. This initiative demonstrates MicroStrategy's ongoing strategy to bolster its Bitcoin holdings, reflecting its strong belief in Bitcoin’s potential as a long-term store of value and a vital component of its corporate treasury strategy.

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