MicroStrategy has expanded its offering of convertible senior notes from an initial $500 million to $700 million. These notes will accrue annual interest at a rate of 2.25% and will mature in 2032.

Investors have the option to convert these notes into shares of MicroStrategy’s stock. The initial conversion rate is set at 0.4894 shares per $1,000 of notes, corresponding to a conversion price of approximately $2,043.32 per share. This price represents a 35% premium over the average trading price of MicroStrategy’s stock on June 13, 2024, which stood at $1,513.46. This conversion feature offers potential upside if MicroStrategy’s stock price rises.

Interest payments on the notes will occur semi-annually starting December 15, 2024. The notes must be repaid by June 15, 2032, unless they are converted into stock earlier. From June 20, 2029 onwards, MicroStrategy has the option to redeem the notes for cash if its stock price reaches at least 130% of the conversion price.

MicroStrategy anticipates raising approximately $687.8 million from this offering, potentially up to $786 million if additional notes are sold, which it plans to allocate towards purchasing more Bitcoin for its treasury.