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In a strategic financial maneuver, MicroStrategy® Incorporated (Nasdaq: MSTR), a global leader in business intelligence, announced the successful completion of its convertible senior notes offering on March 8, 2024.
The offering, which amounted to an aggregate principal of $800 million, signifies a robust move to augment the company’s Bitcoin portfolio, reinforcing its confidence in the digital currency as a core asset.
This private offering targeted qualified institutional buyers, leveraging Rule 144A under the Securities Act of 1933, as amended.
MicroStrategy bullish on Bitcoin
The convertible notes, bearing a modest interest rate of 0.625% per annum and maturing on March 15, 2030, underline MicroStrategy’s long-term investment strategy and its bullish outlook on Bitcoin.
MicroStrategy exercised an option to sell an additional $100 million in notes, highlighting strong investor interest.
This move, completed concurrently with the initial offering, brought the total to $800 million. The interest payments are scheduled semi-annually, starting September 15, 2024, showcasing the structured approach to managing this financial instrument.
The notes, unsecured and ranking senior, provide investors with an opportunity to convert into cash, MicroStrategy class A common stock, or a combination thereof.
This convertible feature is available under specific conditions, emphasizing MicroStrategy’s flexibility and strategic foresight in managing its investment portfolio.
The initial conversion rate is set at 0.6677 shares per $1,000 principal amount of notes, which corresponds to an initial conversion price of approximately $1,497.68 per share.
This represents a significant premium over the last reported sale price of MicroStrategy’s stock, underscoring the company’s value proposition to its investors.
MicroStrategy has earmarked the net proceeds from this offering, approximately $782 million after fees and expenses, for further Bitcoin acquisitions.
The offering, conducted exclusively through a private offering memorandum to qualified buyers, adheres to regulatory compliance while maintaining strategic discretion.
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