MicroStrategy has announced the pricing of its latest offering, which includes $700 million in convertible senior notes due in 2032. These notes will be offered privately to qualified institutional investors who meet the standards of Rule 144A of the Securities Act of 1933. The initial purchasers of the notes will also have the option to buy up to an additional $100 million in notes within 13 days of the issuance date.

The total amount of notes being offered has increased from the previously announced $500 million to $700 million. The issuance is expected to be completed on June 17, 2024, pending the fulfillment of customary closing conditions. The initial conversion rate for the notes has been set at 0.4894 shares of MicroStrategy Class A common stock per $1,000 principal amount of notes. This represents an initial conversion price of $2,043.32 per share, which is a 35% premium over the volume-weighted average price of MicroStrategy Class A common stock on June 13, 2024.

The conversion rate may be adjusted if certain events occur. MicroStrategy plans to use the net proceeds from the sale of the notes to acquire additional bitcoin and for general corporate purposes. The notes will be unsecured, senior obligations of MicroStrategy, and will bear interest at a rate of 2.25% per annum, payable semi-annually in arrears on June 15 and December 15 of each year, beginning on December 15, 2024.

The notes will mature on June 15, 2032, unless earlier repurchased, redeemed or converted in accordance with their terms. MicroStrategy may redeem for cash all or any portion of the notes at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

Holders of the notes may require MicroStrategy to repurchase their notes on June 15, 2029 or upon the occurrence of certain events that constitute a fundamental change under the indenture governing the notes at a repurchase price equal to 100% of the principal amount of the notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the date of repurchase.