MicroStrategy, the business intelligence firm led by Michael Saylor, has announced the pricing of its latest debt offering. Per a new press release, the company plans to raise $700 million through the issuance of convertible senior notes due in 2032, with the purpose for purchasing additional Bitcoin and covering general corporate expenses.
This move follows a previous announcement aimed at raising $500 million, indicating what may be strong investor demand that has allowed MicroStrategy to upsize the offering.
Yuri MolchanThe convertible notes will bear an interest rate of 2.25% per annum, payable semi-annually on June 15 and Dec. 15, starting Dec. 15, 2024. They will mature on June 15, 2032, unless repurchased, redeemed or converted earlier.
MicroStrategy retains the option to redeem the notes for cash after June 20, 2029, under specific conditions, provided the company’s class A common stock meets certain price thresholds.
Investors will have the option to convert the notes into cash, shares of MicroStrategy’s class A common stock or a combination of both. The initial conversion rate is set at approximately 0.4894 MSTR shares per $1,000 principal amount of notes, translating to an initial conversion price of about $2,043.32 per share. This price represents a 35% premium over the company's recent stock price.
Gamza KhanzadaevMicroStrategy estimates net proceeds from the offering to be around $687.8 million, or up to $786 million if the initial purchasers exercise their option to buy additional notes. The sale will be conducted privately only to qualified institutional investors.
Yuri Molchan
Vladislav Sopov
Dan Burgin
Alex Dovbnya