MicroStrategy Expands Financing with $875 Million Senior Notes

• MicroStrategy has raised its convertible senior notes offering from $700 million to $875 million to increase its Bitcoin holdings.
• The raised funds will help redeem $500 million in Senior Secured Notes, releasing over 69,000 BTC as collateral.
• Any remaining proceeds from the $864.1 million will likely be used to buy more Bitcoin, reflecting the company’s bullish outlook.

MicroStrategy has announced an increase in the amount it is raising through its latest convertible senior notes offering. Initially set at $700 million, the company has now raised the amount to $875 million, with an additional option for initial purchasers to buy up to $135 million. The move is expected to further bolster MicroStrategy’s cryptocurrency holdings, given the company’s known commitment to Bitcoin as a core part of its long-term strategy. 

Convertible Senior Notes Offering More 

The convertible senior notes will be offered by private placement to qualified institutional buyers and it will include interest at the rate of 0. 6,250% per annum under rule 144A of the Securities Act. The offering will be serviced on September 19, 2024, and the notes are to be redeemed on September 15, 2028. Furthermore, the company offers early redemption by which the offering may begin in December 2027 if specific measures of the stock performance are achieved.

Focus on Bitcoin Accumulation

The firm’s CEO Michael Saylor has been bullish on Bitcoin as a strategic investment for the firm’s growth for a long time. This has been an ongoing strategy in the company to make more financings to attain more bitcoins. It continues to be among the biggest corporate owners of Bitcoin and has also consistently declared that cryptocurrency will continue to be a core of its investment approach.

Proceeds to Redeem Senior Secured Notes

The funds raised from the offering, expected to total $864.1 million, will be used to redeem $500 million in 6.125% Senior Secured Notes due in 2028. This move will release the collateral backing these secured notes, which includes approximately 69,080 BTC. Any remaining proceeds may be directed toward purchasing additional Bitcoin, further solidifying MicroStrategy’s commitment to the cryptocurrency market.

This increase in financing underscores MicroStrategy’s confidence in Bitcoin and its potential as a store of value. As the firm continues to expand its holdings, the broader market remains keenly focused on how these moves may influence both its financial performance and Bitcoin’s trajectory in the coming years.