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MicroStrategy Unveils New Debt Offering to Bolster Bitcoin (BTC) Position

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Fri, 15/03/2024 - 17:15
MicroStrategy Unveils New Debt Offering to Bolster Bitcoin (BTC) Position
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Business intelligence and software company MicroStrategy has released the pricing of its offering of a $525 million aggregate principal amount of 0.875% Convertible Senior Notes.

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Another MicroStrategy Bitcoin bet in pipeline

The notes, which are due in 2031, will be offered in a public meeting only to qualified institutional buyers. Initial purchasers of the notes will be granted an option to purchase, within 13 days beginning on, and including, the date on which the notes are first issued, up to an additional $78.75 million aggregate principal amount of the notes.

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The firm is offering convertible senior notes to eligible buyers, which will later be convertible into either cash, shares of MicroStrategy’s class A common stock, or a combination of cash and shares of MicroStrategy’s class A common stock, but all at MicroStrategy’s discretion.

MicroStrategy’s aim with these notes centers on buying more Bitcoin to keep its bullish reserve asset strategy alive. The company remains one of the top corporate firms with the largest BTC holding, with only BlackRock competing with it in terms of total assets locked.

MicroStrategy's Bitcoin holding is currently about 203,000 BTC after a recent purchase of 12,000 units of Bitcoin, while BlackRock’s stash has topped the 205,000 threshold.

Long-term approach

Meanwhile, the expected maturity date for the notes is March 15, 2031. The only exception is if the notes were earlier repurchased, redeemed or converted per their terms. By Sept. 15, 2028, holders of the notes may require MicroStrategy to repurchase their notes. Its conversion is similar to that of the previous $500 million sales.

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MicroStrategy’s renewed optimism to buy more Bitcoin stems from the profit it has picked up over the past few weeks, justifying its bet on an asset labeled risky by critics. With more Bitcoin in the pipeline, proponents argue that MicroStrategy’s bullish stance might eventually be contagious across the board.

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