MicroStrategy Plans $700 Million Convertible Notes Offering

According to CoinDesk, MicroStrategy has announced its intention to issue $700 million in convertible senior notes due in 2028. The company plans to use $500 million of the proceeds to redeem a previous tranche of senior secured notes with a 6.125% annual yield, also maturing in 2028. The remaining funds will be allocated towards purchasing additional bitcoin and for general corporate purposes. MicroStrategy also intends to grant initial purchasers an option to buy up to an additional $105 million in notes within a 13-day period starting from the issuance date. The company may redeem all or part of the notes for cash on or after December 20, 2027, subject to certain conditions. Led by Executive Chairman Michael Saylor, MicroStrategy began purchasing bitcoin in 2020, adopting it as a reserve asset for its treasury. The firm has since become the largest corporate buyer of bitcoin, accumulating 244,800 BTC, valued at approximately $14.2 billion at current prices. Recently, MicroStrategy disclosed the purchase of an additional $1.1 billion worth of bitcoin, leaving $900 million available under a previous offering. Other public companies, such as Semler Scientific and Japanese investment adviser Metaplanet, have followed MicroStrategy's lead in issuing debt to accumulate bitcoin. MSTR shares fell 4.9% during regular trading today, coinciding with a significant decline in bitcoin's price. Shares dropped another 1.6% in after-hours trading but remain up by about 300% year-over-year.