MicroStrategy gains $2.97b to buy more BTC after convertible note offering

MicroStrategy has completed its 0% convertible senior note offering. The company states that the net proceeds from the offering will be used to purchase more Bitcoin.

MicroStrategy’s executive chairman, Michael Saylor, announced on November 22 that the company had completed its offering of convertible senior notes due December 1, 2029. The total principal amount was previously announced as 2.6 billion dollars, but later reached 3 billion dollars. An additional $400 million worth of notes were printed as a green shoe option.

MicroStrategy received approximately $2.97 billion in net proceeds from the bond sales, after deducting buyer discounts. According to the press release, the sale proceeds will be used to purchase more Bitcoin (BTC) and fund the company’s general corporate needs.

The notes were sold over a three-day period in a private offering available only to persons who qualify as institutional buyers, pursuant to Rule 144A of the Securities Act of 1933.

Buyers can convert the notes into cash, MicroStrategy’s Class A shares, or a combination of both.

The conversion rate for the notes was initially 1.4872 shares of MicroStrategy’s class A common stock per $1,000 principal amount, valued at approximately $672.40 per share. The notes offered have a 55% conversion premium over MicroStrategy’s Class A shares

However, the company stated that investors will be able to convert the bonds before June 1, 2029, only if certain events occur and during certain periods. They can then do so at any time until the second scheduled trading day following the maturity date.

Before the sale, the company announced it would increase its offering of convertible senior notes from $1.75 billion to $2.6 billion following high demand for the bonds. At that time, MSTR shares had increased by 620% since the beginning of the year and by 871% last year.

Following the increase, MicroStrategy stock became the “most traded stock in America.”

Not only that, MicroStrategy currently holds the title of the largest institutional holder of Bitcoin. After the latest purchase of 51,780 BTC, the company holds a total of 331,200 BTC, or more than $32.6 billion in value, following Bitcoin’s recent rally above $99,000.