MicroStrategy, a leading business intelligence firm known for its extensive holdings in bitcoin, has disclosed the pricing details for its upcoming offering of $700 million in 2.25% convertible senior notes. The offering is slated to conclude on June 17, pending regulatory approvals.

The unsecured notes, set to mature in 2032 unless repurchased, redeemed, or converted earlier, will be privately offered to qualified institutional buyers as per regulatory requirements. Initially, the conversion rate for these notes will be 0.4894 shares of MicroStrategy class A common stock per $1,000 principal amount. This conversion ratio equates to approximately $2,043.32 per share, reflecting a premium of about 35% over the U.S. composite volume-weighted average price of the stock.

MicroStrategy expects to generate net proceeds of approximately $687.8 million from this offering. The company plans to utilize these funds primarily to acquire additional bitcoin, in addition to funding general corporate purposes. Notably, MicroStrategy already holds 214,400 bitcoins as part of its treasury reserve strategy.

Earlier reports indicated MicroStrategy's intention to raise $500 million through this convertible senior note offering, with an option to increase it by an additional $75 million.

Analysts from Bernstein, a research and brokerage firm, recently initiated coverage on MicroStrategy with an optimistic outlook. They assigned an outperform rating to the company's stock and set a target price of $2,890 by the end of next year, projecting an 80% increase from current levels.

Bernstein analysts highlighted the favorable risk profile of MicroStrategy's debt, suggesting low risk for the 2025 convertible notes and moderate risk for the 2027/2030 convertible notes, contingent on current bitcoin prices. They emphasized that MicroStrategy's long-term convertible debt strategy aligns well with potential upside in bitcoin prices, mitigating liquidation risks associated with its substantial bitcoin holdings.

As MicroStrategy prepares to finalize its convertible note offering, market observers await further developments, anticipating how the company's strategic moves will impact both its financial position and its role within the evolving landscape of digital assets.