Breaking: MicroStrategy Announces $500M Notes Sale To Buy More Bitcoin

MicroStrategy, led by Michael Saylor, is once again increasing its bets on the crypto sector with the aim to add more Bitcoin to its portfolio. In a recent announcement, the firm has unveiled its plans to issue $500 million in convertible senior notes. Notably, MicroStrategy said that it intends to use the proceeds to buy more Bitcoin and for other business purposes.

Meanwhile, this is not the first time MicroStrategy has taken this step to offer senior notes to increase its Bitcoin holdings. So, let’s look at the development and see how the company is increasing its bets on Bitcoin.

MicroStrategy To Buy More Bitcoin With $500 Mln Notes Sale

MicroStrategy, known for its robust Bitcoin accumulation strategy, announced a $500 million private offering of convertible senior notes. According to the announcement, these notes, due in 2032, are aimed at institutional buyers.

Notably, the company intends to use the proceeds primarily to purchase additional Bitcoin, aligning with its ongoing strategy of leveraging debt to expand its cryptocurrency holdings. Meanwhile, the convertible senior notes are unsecured and senior, meaning they rank higher in claim priority over other debt but lack collateral backing.

The announcement notes that interest on these notes will be payable semi-annually, with the first installment due in December 2024. They will mature in June 2032, unless converted, redeemed, or repurchased earlier. Notably, MicroStrategy can redeem any portion of the notes, provided at least $75 million in aggregate principal remains outstanding from June 2029.

It’s worth noting that the conversion terms of the notes also offer flexibility to traders. They can be converted into cash, shares of MicroStrategy’s class A common stock, or a mix of both.

However, conversion is restricted until December 2031, only becoming freely convertible shortly before the maturity date. This structure provides potential upside linked to the performance of MicroStrategy’s stock while also offering protection against downside risks through the senior unsecured status of the notes.

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