MicroStrategy to Raise $700M From Convertible Senior Notes

Business intelligence company MicroStrategy has announced its plan to raise $700 million from convertible senior note sales via a private offering. According to an accompanying press release, the company will inject portions of the fund into its Bitcoin portfolio.

MicroStrategy Announces Proposed Private Offering of $700M of Convertible Senior Notes $MSTR https://t.co/OCq7wj2u0P

— Michael Saylor⚡️ (@saylor) September 16, 2024

Notably, MicroStrategy’s latest announcement to raise money comes three days after the firm bought 18,300 BTC worth $1.11 billion. The acquisition took the company’s total BTC stash to 244,800 BTC, valued above $14.1 billion according to the current market price.

MicroStrategy to Raise $700M

The company’s private offering of senior convertible notes is open to investors classified as institutional buyers under the Securities Act of 1933. The notes will mature on September 15, 2028. Potential buyers can require MicroStrategy to repurchase part or all of their notes on September 15, 2027. The notes can be converted into cash or the business intelligence company’s stock, MSTR.

MicroStrategy intends to use proceeds from the sale to repay debt incurred from past BTC acquisitions and bolster its BTC holdings. Its announcement stated:

“MicroStrategy intends to use the net proceeds from this offering to redeem all $500.0 million outstanding aggregate principal amount of MicroStrategy’s 6.125% Senior Secured Notes due 2028 [. . .] and to use any balance of the net proceeds to acquire additional bitcoin and for general corporate purposes.”

MSTR’s price ended on Monday business hours at $134.53, signaling a 4.91% drop within 24 hours. With the latest announcement proposing more cash flow within the company, the stock’s price may see a considerable uptrend during Tuesday’s business hours.

Institutional Bitcoin Adoption Increases

MicroStrategy’s executive chairman and co-founder, Michael Saylor, has led the company on the path of institutional Bitcoin acquisition over the past four years. Several companies have embraced a similar goal of stacking up BTC.

Earlier this month, the Japanese investment firm Metaplanet invested $2 million in Bitcoin, growing its stash to nearly 300 BTC. Following its most recent acquisition in late August, Semler Scientific, a medical tech firm, now holds 1,012 BTC. Mining companies and ETF issuers have also played roles in taking BTC to institutional investors.