MicroStrategy $700M Bitcoin Move

1. MicroStrategy increases convertible note sale from $600M to $700M to acquire more Bitcoin.
2. The notes, issued at a 0.625% interest rate, with an option to buy an additional $100M within 13 days.
3. MicroStrategy’s stock surges over 20% in intraday trading, trading at $1,260, reflecting a 444% increase in the past year.

MicroStrategy is boosting its convertible debt offering to $700 million, responding to Bitcoin’s recent all-time high. The company plans to utilize the net proceeds for acquiring more Bitcoin and general corporate purposes.

Upsizing and Pricing Details

Firstly, the convertible debt offering, announced on Monday, experienced a significant upsize on Wednesday, reaching $700 million.

MicroStrategy issued the notes at a competitive interest rate of 0.625% per annum, with semi-annual payments in arrears beginning on September 15, 2024, and a maturity date set for March 2030.

Option for Additional Purchase

The company has granted initial purchasers an option to acquire up to an additional $100 million aggregate principal amount of the notes within a 13-day period from the issuance date.

MicroStrategy may redeem the notes under specific scenarios by March 22, 2027. The company anticipates the net proceeds to total between $684 million and $782 million, depending on whether the purchasers exercise their option to buy more notes.

Diverse Utilization of Funds

Aside from expanding its Bitcoin holdings, MicroStrategy intends to allocate the funds for “general corporate purposes.” This strategic decision aims to enhance the company’s financial flexibility and support its overall operations.

MicroStrategy’s stock witnessed a remarkable surge, soaring over 20% in intraday trading. That is, at the time of publication, shares were trading at $1,260. Hence, it is reflecting a staggering 444% increase over the past year.

Bitcoin’s Role in MicroStrategy’s Strategy

MicroStrategy’s recent decision to increase its convertible debt offering follows Bitcoin’s new all-time high. In fact, this is exceeding the previous record from November 2021. With an existing holding of 193,000 bitcoins, MicroStrategy underscores its confidence in the digital asset. This reaffirms Bitcoin’s role as a critical component in MicroStrategy’s strategic financial decisions. At the time of the article, Bitcoin was trading around $67,000.

Hence, with its expanded size and strategic purpose, showcases MicroStrategy’s commitment to leveraging Bitcoin as a key asset in its corporate strategy.