MicroStrategy Targets $600M Convertible Notes Issuance to Buy More BTC

MicroStrategy, the largest independent publicly-traded business intelligence company, has recently announced that it will issue about $600 million worth of convertible senior notes to investors in a bid to acquire more bitcoins.

According to an official press release published on Tuesday, MicroStrategy noted that the convertible senior notes, which are due 2027, will be issued to a list of “qualified institutional buyers” in a private offering pursuant to Rule 144A under the Securities Act.

The notes represent unsecured, senior obligations of MicroStrategy which bears interest that will be paid semi-annually in arrears. The interests will be paid every February 15 and August 15 until they mature on February 15, 2027, except if they are repurchased or converted before 2027.

These convertible senior notes can be converted to cash, shares of MicroStrategy’s class A common stock, or a combination of both at the company’s choosing.

Additionally, Microstrategy intends to give the very first set of investors the choice of buying up to an additional $90 million aggregate principal amount of the converter senior notes within a period of 13 days starting on the day the notes were first issued.

It is yet unclear as to when and on what terms the private offering will be completed since it is still subject to changing market conditions and several other variables.

The interest rate, conversion rate, conversion price, and specific other terms of the convertible notes will be determined at the time of pricing of the offering

MicroStrategy plans to use the net proceeds from the sale of the notes to acquire additional bitcoins to further increase its Bitcoin holdings.

MicroStrategy has shown time and time again that it does not intend to slow down on its bitcoin purchases. The company just recently added $10 million worth of bitcoin to its portfolio, bringing its total bitcoin holdings to 71,079 bitcoins valued at $1.145 billion.

The company’s CEO, Micheal Saylor, has always been a strong bitcoin proponent and this had prompted him to make bitcoin the primary reserve asset of MicroStrategy.