MicroStrategy Upsizes Private Offering Amid Bitcoin Acquisition Plans

MicroStrategy Incorporated has announced an increase in its previously disclosed offering of convertible senior notes. The company will now offer $2.6 billion in zero-interest convertible senior notes, a significant upsizing from the initially proposed $1.75 billion. These notes are set to mature on December 1, 2029, with the offering expected to close on November 21, 2024.

MicroStrategy Expands Convertible Notes Offering

According to a recent press brief, MicroStrategy has increased its private offering of convertible senior notes from the initially proposed $1.75 billion to $2.6 billion. The zero-interest notes will be available exclusively to qualified institutional buyers and select non-U.S. investors under the Securities Act.

The notes, which mature on December 1, 2029, are convertible into cash, MicroStrategy’s Class A common stock, or a combination of both, depending on the company’s discretion. The initial conversion price is set at $672.40 per share, representing a 55% premium over the November 19 stock price of $433.80. 

Net proceeds from the offering are estimated to be $2.58 billion, which could rise to $2.97 billion if the option for additional notes is exercised.

Moreover, the proceeds from this offering will largely support the company’s ongoing Bitcoin acquisition strategy. The company plans to use the funds to purchase more Bitcoin and for other corporate purposes. Since adopting a Bitcoin treasury strategy in 2020, MicroStrategy has accumulated 331,200 BTC, valued at approximately $30 billion based on current market prices.

This aggressive approach aligns with MicroStrategy’s broader vision of leveraging Bitcoin as a core treasury asset. The company’s leadership views this as a long-term strategy to enhance shareholder value and corporate positioning.

Most recently, the company chairman, Michael Saylor, explained how a U.S. Bitcoin reserve of one million BTC could reduce the national debt by up to 45%. In response to today’s announcements, Saylor added,

“Given the high demand, we upsized our $MSTR offering of 0% convertible bonds due 2029 from $1.75 billion to $2.6 billion, including a $400 million greenshoe option, and priced it at a 55% conversion premium.”

Entry Into The Top 100 U.S. Public Companies

Following this upsized offering and Bitcoin’s recent price surge, MicroStrategy has entered the top 100 publicly traded companies in the U.S. by market capitalization. With a valuation nearing $100 billion, the company’s stock has gained 528% year-to-date.

As Bitcoin reached new all-time highs of over $94,000, MicroStrategy’s stock also experienced a significant rally. Shares surged 12% on Tuesday and continued to climb, trading at $471.00 as of November 20, 2024. This performance has positioned the company as a key player in the cryptocurrency and corporate finance sectors.

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