MicroStrategy has concluded an approximately $1.01 billion offering of 0.625% convertible senior notes due in 2028, allocating proceeds for Bitcoin purchases and debt repayment.
Targeting institutional investors, the private offering concluded on Sept. 19 and permitted the conversion of shares into cash or MicroStrategy stock.
Additionally, the organization intends to allocate a portion of the funds to redeem $500 million in senior secured notes, which will result in the release of collateral, which includes 69,080 Bitcoin.
MicroStrategy submitted its most recent Form 8-K to the United States Securities and Exchange Commission on Sept. 20, which states that between September 13 and 19:
“MicroStrategy acquired approximately 7,420 bitcoins for approximately $458.2 million in cash, using proceeds from the Offering, at an average price of approximately $61,750 per bitcoin, inclusive of fees and expenses.”
Details regarding convertible notes and redemption alternatives
The convertible senior notes are unsecured and bear an annual interest rate of 0.625%. They are payable semi-annually on Mar. 15 and Sept. 15.
The notes will mature in 2027 unless they are converted, redeemed, or repurchased before that date, as stated in the official press release from MicroStrategy.
The initial conversion rate for the publicly traded software company is 5.4589 shares of class A common stock per $1,000 principal amount of shares of notes.
This conversion equals approximately $183.19 per share, representing a 40% increase over the stock’s valuation as of Sept. 17.
Utilization of the proceeds
MicroStrategy intends to finance its aggressive BTC acquisition strategy by utilizing the approximately $997.4 million net proceeds of the raise, after fees and expenses.
General corporate purposes will be the primary objective of the remaining funds, with a secondary emphasis on the firm’s BTC holdings.
A portion of the net proceeds will be allocated to the $500 million senior secured notes scheduled for redemption on Sept. 26.
In BTC, MicroStrategy has $14.14 billion
MicroStrategy disclosed on Sept. 13 that it acquired approximately 18,300 Bitcoins of $1.11 billion between Aug. 6 and Sept. 12.
According to the SEC filing, the purchasing firm acquired the Bitcoin at an average price of $60,408 per unit.
In an X post, Michael Saylor, MicroStrategy’s co-founder and executive chairman, disclosed that the company had amassed 244,800 BTC as of Sept. 12 and achieved a BTC yield of 4.4% quarter-to-date and 17% year-to-date.
