MicroStrategy, a prominent institutional Bitcoin investor, has unveiled a plan to raise $500 million through a private offering of convertible notes. The company aims to use the proceeds to bolster its Bitcoin holdings.
The offering, known as the MicroStrategy $500M Bond Offering, is targeted towards qualified institutional buyers under Rule 144A of the Securities Act 1933. Initial clients will have the opportunity to purchase an additional $75 million in aggregate principal amount of the notes within 13 days of the issuance date.
These unsecured and senior priority notes will accrue interest every six months on June 15 and December 15, beginning in December 2024. The maturity date for the notes is set for June 15, 2032, unless redeemed, repurchased, or converted earlier. MicroStrategy has the option to redeem the investments for cash on or after June 20, 2029, subject to certain conditions.
Investors also have the right to demand the repurchase of their notes for cash on June 15, 2029. Additionally, MicroStrategy may, at its discretion, exchange the notes for cash, shares of the company’s Class A common stock, or a combination of both.
The specifics of the notes, such as interest rate and initial conversion rate, will be determined at the time of pricing. MicroStrategy anticipates that the reference price for the initial conversion will be based on the volume-weighted average price of its Class A common stock on the pricing date.
The $500 million raised from the note sale will be used to further expand MicroStrategy’s Bitcoin holdings and support corporate activities. The company currently holds 214,400 BTCs valued at over $14.49 billion, with a staggering unrealized profit of approximately $7 billion from this BTC portfolio.
It is important to note that these notes are being privately offered to institutional investors and will not be registered with the SEC or any other regulatory body. Therefore, they will not be available for sale in the United States unless registered or exempt from registration.
This article is for informational purposes only and should not be construed as financial advice. The opinions expressed are those of the author and do not necessarily reflect The Crypto Basic’s views. Readers are advised to conduct thorough research before making any investment decisions, as The Crypto Basic is not liable for any financial losses.
