MicroStrategy — the software firm known for siphoning billions of dollars into Bitcoin (BTC) for its coffers — proposed another $700 million capital raising measure.
In a Sept. 16 press release, MicroStrategy announced its intention to offer $700 million aggregate principal amount of convertible senior notes due 2028 in a private offering to institutional buyers. The company also expects to grant note purchasers an option to purchase up to an additional $105 million within 13 days of the issuance of the first notes. Conditions are subject to change:
“The offering is subject to market and other conditions, and there can be no assurance as to whether, when or on what terms the offering may be completed.”
The contract details
MicroStrategy highlights that the notes will be unsecured senior obligations issued by the company and will bear 6.1% interest payable semi-annually beginning in March 2025. The notes will mature on Sept. 15, 2028 unless repurchased, redeemed or converted earlier.
MicroStrategy reserves the right to redeem for cash all or any portion of the notes issued. If the company decides only to redeem a portion, at least $75 million must be left over.
Noteholders will have the right to require MicroStrategy to repurchase all or any portion of the notes for cash on Sept. 15, 2027. The notes can also be converted into MircroStrategy class A common stock.
The net proceeds from this offering are expected to be used to acquire even more Bitcoin. MicroStrategy has long been known to make major Bitcoin purchases regularly, with ReadWrite reporting a $593 million purchase back in late 2023.
MicroStrategy positioned its stock as a regulatory-friendly way to invest in Bitcoin for institutions, especially before the approval of the Bitcoin spot exchange-traded funds. One major example is offered by South Korea’s Public Pension Fund acquiring 245,000 shares in MicroStrategy during the second quarter of 2024.
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