MicroStrategy is looking to offer $500 million worth of convertible senior notes, with proceeds used to purchase additional Bitcoin (BTC), the company announced on Thursday. Notes mature in 2032.
On Thursday, MicroStrategy revealed plans to offer qualified institutional buyers the opportunity to purchase unsecured convertible senior notes that will be due in 2032.
Stating that the private offering would be subject to market conditions and other factors, the company said these notes will bear interest payable semi-annually and in arrears every June 15 and December 15.
This will run until maturity on June 15, 2032, unless the notes are repurchased, redeemed or converted as per the offering’s terms.
MicroStrategy, could, subject to conditions, redeem for cash, all or some of the notes.
“Holders of the notes will have the right to require MicroStrategy to repurchase for cash all or any portion of their notes on June 15, 2029,” the US-based firm noted.
MicroStrategy will use proceeds to buy more Bitcoin
According to today’s announcement, notes are convertible into cash, shares of the company’s class A common stock, or a combination of the two.
The reference price in the calculation of the initial conversion will be the composite volume weighted average of MicroStrategy’s stock from 9:30 am through 4:00 pm EDT on the date of the pricing.
If the sale happens, MicroStrategy will use the net proceeds to buy more Bitcoin to add to the 214,400 BTC the company held as of April 30, 2024.
The company will also use these funds for other corporate purposes.
