Institutional Bitcoin investor MicroStrategy has revealed plans to raise $500 million through a private offering of convertible notes.
In a press statement today, the company announced that it intends to leverage the resulting proceeds to expand its Bitcoin holdings.
MicroStrategy Announces Proposed Private Offering of $500 Million of Convertible Senior Notes $MSTR https://t.co/5K8TqAi1D7
— Michael Saylor⚡️ (@saylor) June 13, 2024
MicroStrategy $500M Bond Offering
MicroStrategy is offering the notes to qualified institutional shoppers under the amended Rule 144A of the Securities Act 1933. The company seeks to give initial clients the option to purchase an additional $75 million in aggregate principal amount of the notes within 13 days of the issuance date.
According to the report, the notes will be unsecured and senior in priority. Interest is payable every six months on June 15 and December 15, starting from December 2024.
Furthermore, the notes will have a maturity date of June 15, 2032, unless redeemed, repurchased, or converted beforehand. MicroStrategy retains the right to redeem the investments for cash on or after June 20, 2029, though subject to conditions.
Moreover, investors will have the right to demand that MicroStrategy repurchase their notes for cash on June 15, 2029. Additionally, at MicroStrategy’s discretion, the notes may be exchange for cash, shares of the company’s Class A common stock, or a combination of both.
The specific details of the notes, including the interest rate and initial conversion rate, will be finalized at the time of pricing. MicroStrategy anticipates that the reference price for the initial conversion will be based on the volume-weighted average price of its class A common stock on the pricing date.
Raised $500M To be Invested in Bitcoin
MicroStrategy intends to allocate the net proceeds from the note sale toward expanding its Bitcoin holdings and supporting corporate activities. At the last check, the company holds 214,400 BTCs valued at over $14.49 billion. Notably, the Bitcoin whale boasts a staggering unrealized profit of approximately $7 billion from this BTC portfolio.
Disclaimer on Note Sales
In the announcement, MicroStrategy stressed that the notes would be privately offered to institutional investors and would not be registered with the SEC or any other regulatory body, as always.
As a result, they will not be available for sale in the United States unless registered or exempt from registration.
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