TechFlow news — On September 17, MicroStrategy (Nasdaq: MSTR) announced plans to issue $700 million in aggregate principal amount of senior convertible notes due 2028. The private placement will be offered to qualified institutional buyers under Rule 144A of the Securities Act of 1933. The company has also granted the initial purchasers an option to purchase up to an additional $105 million in notes within 13 days of the initial issuance date.
The notes are unsecured senior obligations, bearing interest payable semi-annually on March 15 and September 15, with the first payment due on March 15, 2025. The notes will mature on September 15, 2028, unless earlier repurchased, redeemed, or converted according to their terms. Starting from December 20, 2027, subject to specific conditions, MicroStrategy may elect to redeem all or part of the notes for cash.
MicroStrategy intends to use the net proceeds from this offering for the following purposes:
- Redeem $500 million in outstanding 6.125% senior secured notes at a redemption price of 103.063% of the principal amount, plus accrued and unpaid interest, totaling approximately $523.8 million, with a redemption date set for September 26, 2024.
- Increase its Bitcoin holdings and meet general corporate purposes.
Notably, upon completion of the redemption of the existing secured notes, approximately 69,080 Bitcoins used as collateral will be released, enhancing the company's asset liquidity. As of the second-quarter 2024 financial report, MicroStrategy’s total Bitcoin holdings exceeded 150,000 coins, with an average purchase price of approximately $30,000 per Bitcoin.
