MicroStrategy proposes $500 million of Convertible Senior Notes to buy more BTC
MicroStrategy, led by Michael Saylor, announced that the company plans to raise $500 million to buy more Bitcoin (BTC) and other business purposes through a convertible senior note offering due in 2032.
MicroStrategy Announces Proposed Private Offering of $500 Million of Convertible Senior Notes $MSTR https://t.co/5K8TqAi1D7
— Michael Saylor⚡️ (@saylor) June 13, 2024
The corporate bitcoin holder and business intelligence firm stated that the private offering of $500 million in senior convertible notes is subject to market conditions and other factors. There is no guarantee as to whether, when, or under what terms the offering may be completed. In accordance with Rule 144A of the Securities Act of 1933, as amended (the "Securities Act"), this offer will be made to individuals who are deemed to be qualified institutional buyers, the company said in a statement on Thursday.
Additionally, MicroStrategy plans to give the original buyers of the notes the option to buy up to an additional $75 million in the total principal amount of the notes within a 13-day window that starts on the day the notes are first issued.
Starting on December 15, 2024, interest will be paid semi-annually in arrears on June 15 and December 15 of each year for the notes, which are senior obligations of MicroStrategy and will be unsecured. If the notes are not repurchased, redeemed, or converted in line with their terms, they will mature on June 15, 2032.
On or after June 20, 2029, MicroStrategy may redeem all or any portion of the notes for cash, subject to specific conditions. A minimum of $75 million in the total principal amount of notes must be outstanding and not subject to redemption as of the applicable redemption notice date in the event that MicroStrategy redeems less than all of the outstanding notes.
On June 15, 2029, note holders will have the right to demand that MicroStrategy repurchase all or any portion of their notes for cash. The notes have the option to be converted, at MicroStrategy's discretion, into cash, shares of the company's class A common stock, or a combination of both.
The notes will only be convertible before December 15, 2031, and only then under specific conditions. After that, they will be convertible at any time until the second scheduled trading day, which comes right before the maturity date. The notes' interest rate, initial conversion rate, and other terms will be decided upon when the offering is priced.
MicroStrategy anticipates that the United States of America composite volume weighted average price of class A common stock of the company from 13:30 PM to 20:00 PM GMT on the day of pricing will be the reference price utilized to determine the initial conversion price for the notes.
As of May 1, 2024, MicroStrategy already owned a remarkable 214,400 bitcoins. The announcement coincides with the company's continued doubling down on its Bitcoin investment strategy.
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