MicroStrategy Issues $875 Million in Convertible Bonds to Acquire More Bitcoin, Holdings Approach 245,000 BTC

MicroStrategy, the U.S.-listed company known for its aggressive Bitcoin accumulation, has announced plans to sell convertible senior notes worth up to $875 million. This marks the company’s third corporate bond issuance of 2024, led by its founder, Michael Saylor.

Initially planned at $700 million, the bond offering was increased to $875 million in an official statement on the 18th of September. The bonds, maturing in 2028, carry a 0.625% interest rate and are targeted towards institutional investors.

Further Bitcoin Accumulation by MicroStrategy

In its announcement, MicroStrategy outlined the key terms of the convertible bonds:

• They are unsecured senior notes, with interest payable semi-annually starting from 15 March 2025.
• From 20 December 2027 onwards, MicroStrategy can redeem all or part of the bonds in cash.
• Before 15 March 2028, bondholders can convert the notes under certain conditions, with unrestricted conversion after maturity.
• The initial conversion rate is set at 5.4589 shares of MicroStrategy Class A stock for every $1,000 of convertible bonds.

After deducting fees, MicroStrategy is expected to net approximately $864.1 million from the issuance. The funds will primarily be used to redeem a previous $500 million bond due in 2028, while any remaining capital will be allocated to purchasing additional Bitcoin and for general corporate purposes.

Read more: Louisiana in the United States accepts Bitcoin payments, and Trump's use of BTC to buy burgers in New York has caused heated discussions

Bitcoin Price Surge, MicroStrategy Stock Rises

Following the bond announcement, Bitcoin surged past $62,000, and MicroStrategy’s stock saw a 2.31% increase in after-hours trading, reaching $135.74 per share.

MicroStrategy's Bitcoin Holdings Now Worth $14.6 Billion

Despite the sluggish Bitcoin market over recent months, MicroStrategy has consistently increased its holdings. According to the latest figures from BitcoinTreasuries, the company’s Bitcoin reserves have grown from 214,400 BTC in June to 244,800 BTC, at a cost of $9.45 billion. Currently, the value of these holdings stands at $15.1 billion, with unrealised profits of $5.65 billion.

MicroStrategy Bitcoin Positioning

While a significant portion of the newly raised funds will be used for debt repayment, MicroStrategy remains committed to further Bitcoin accumulation, with the milestone of holding 250,000 BTC likely to be reached soon.

Read more: MicroStrategy purchased an additional 18,300 Bitcoins worth $1.1 billion in the past month