MicroStrategy plans to issue $600 million in convertible senior notes due 2030 to fund additional Bitcoin purchases, following a 20% surge in its stock price on March 4.

This private offering targets qualified institutional buyers and depends on market conditions. The funds will support the company's future projects amid market fluctuations.

MicroStrategy's stock has risen 461.8% over the past year as Bitcoin recovered from its lows. As of now, MSTR is trading at $1,334.01, up 23.59% in 24 hours, coinciding with Bitcoin nearing its all-time high after a period of consolidation.

Offering Details

The company plans to give initial purchasers a 13-day option to buy an additional $90 million in notes, potentially raising the total to $690 million. These unsecured notes, maturing on March 15, 2030, will rank senior in MicroStrategy's obligations and pay interest semi-annually starting September 15, 2024.

MicroStrategy can redeem the notes for cash after March 22, 2027, under specific conditions, ensuring financial flexibility. The notes can be converted into cash, MicroStrategy's class A common stock, or a mix of both, aligning with the company’s growth strategy.

The terms of the conversion, including the rate and price, will be finalized at the offering’s pricing. The offering and any resulting shares of MicroStrategy’s class A common stock won’t be registered under the Securities Act or state laws, so they can’t be offered or sold in the US without registration or an exemption.

Saylor’s Confidence in Bitcoin

The proceeds will be used to invest in Bitcoin and cover general corporate expenses, reflecting Chair Michael Saylor’s belief in the cryptocurrency. As of March 4, MicroStrategy holds around 193,000 BTC, bought at an average of $31,554, totaling $6.1 billion, now valued at over $13 billion with Bitcoin at $68,039.

This move highlights MicroStrategy’s confidence in Bitcoin as a viable corporate asset. Saylor has stated he plans to continue holding Bitcoin indefinitely, viewing it as the “exit strategy” and a key component in the “digital transformation of capital.”