MicroStrategy has successfully completed its offering of 0% convertible senior notes, raising $2.97 billion in net proceeds. The company announced that these funds will primarily be used to acquire more Bitcoin, further cementing its position as the largest corporate Bitcoin holder.
On November 22, Michael Saylor, Executive Chairman of MicroStrategy, confirmed that the company had closed its offering of convertible senior notes, which are due to mature on December 1, 2029. The total principal raised from the offering initially aimed for $2.6 billion but ended up at $3 billion, thanks to an additional $400 million in notes issued through a greenshoe option.
After accounting for purchaser discounts, MicroStrategy netted $2.97 billion from the sale of the notes. As stated in the company’s press release, the proceeds will be used for Bitcoin purchases and to meet other corporate needs.
The offering, which took place over a three-day period, was a private placement available only to institutional investors who qualify under Rule 144A of the Securities Act of 1933.
Details of the Convertible Notes
Investors in the offering received the option to convert the notes into cash, shares of MicroStrategy’s Class A common stock, or a combination of both. The conversion rate was set at 1.4872 shares of MicroStrategy stock per $1,000 of principal, which is equivalent to approximately $672.40 per share—representing a 55% premium over the company’s Class A stock price.
However, noteholders can only convert their notes before June 1, 2029, if certain conditions are met and during designated periods. After that date, they can convert their notes at any time before the maturity date.
Upsizing of the Offering
Before closing the offering, MicroStrategy increased the size of its convertible notes offering from $1.75 billion to $2.6 billion due to strong demand from investors. This surge in interest followed a massive increase in the company’s stock price, which had jumped 620% year-to-date and 871% over the past year. As a result, MicroStrategy’s stock has become one of the most traded stocks in the U.S.
Bitcoin Holdings Surge
In addition to raising funds through the notes offering, MicroStrategy continues to expand its Bitcoin holdings. The company recently purchased an additional 51,780 BTC, bringing its total Bitcoin holdings to 331,200 BTC, valued at over $32.6 billion based on Bitcoin’s recent rise above $99,000.
With its ongoing investments in Bitcoin, MicroStrategy remains the largest corporate holder of Bitcoin, a position it has maintained since beginning its acquisition strategy in 2020.
