Business intelligence firm and long-time Bitcoin holder MicroStrategy has announced plans to offer $500 million in convertible senior notes due in 2032. This move is part of their ongoing strategy to acquire more Bitcoin and support other corporate activities.
MicroStrategy’s Additional Purchase Option
The company, listed on NASDAQ, revealed that initial buyers of these notes will have the option to purchase up to an additional $75 million in notes within 13 days from the issuance date. This option provides buyers with a significant opportunity to increase their investment.
The issued notes will be unsecured senior obligations of MicroStrategy. They will accrue interest, payable semi-annually on June 15th and December 15th, beginning on December 15th, 2024. The notes will mature on June 15th, 2032, unless repurchased, redeemed, or converted earlier.
Redemption and Repurchase
Starting from June 20, 2029, MicroStrategy can redeem all or part of the notes for cash, provided at least $75 million in principal remains outstanding. Note holders also have the option to require MicroStrategy to repurchase any portion of their notes for cash on June 15, 2029.
The notes are convertible into cash, MicroStrategy class A common stock, or a combination of both at the company’s discretion. Until December 15, 2031, conversions will only occur upon certain events or during specific periods. After this date, the notes will be convertible at any time until two days before the maturity date.
The company stated that the interest rate, initial conversion rate, and other terms of the notes will be determined at the time of pricing. The reference price for the initial conversion price will be based on the U.S. composite volume-weighted average price of MicroStrategy’s class A common stock from 9:30 AM to 4:00 PM EDT on the pricing date.
