MicroStrategy plans to issue $500 million in convertible bonds to accelerate Bitcoin investment strategy

MicroStrategy is doubling down on its debt program to fund another massive Bitcoin acquisition.

MicroStrategy plans to issue a total of $500 million in convertible senior bonds that will mature in 2032, with the purpose of raising funds to increase investment in Bitcoin.

This private placement is mainly for qualified institutional investors, with the purpose of strengthening the company's resources in a volatile market environment.

As of June 13, MicroStrategy held more than 1% of Bitcoin’s circulating supply, equivalent to 214,400 BTC, worth approximately $15 billion.

Issuance details

MicroStrategy announced it will give initial purchasers an additional option to purchase an additional $75 million in senior notes within 13 days of issuance. The convertible senior notes are unsecured and set to mature on June 15, 2032. Interest payments on the bonds will be made semi-annually, with the first interest payment expected to be made on December 15, 2024.

The company stated that it will have the option to redeem the bonds in whole or in part for cash after June 29, 2029, subject to the satisfaction of certain conditions providing financial flexibility.

Investors have the option to convert the bonds into cash, shares of MicroStrategy's Class A common stock, or a combination of the two. This will constitute a versatile financial instrument that is consistent with the company's growth strategy and investment approach. The specific conditions for conversion, including the exchange rate and price, will be determined during the bond issuance pricing stage.

It is reported that the issuance of MicroStrategy’s Class A common stock and the subsequent possible conversion of shares will not be registered in compliance with the Securities Act or state-level securities regulations. This means that the shares are not permitted to be issued or sold in the United States without registration or an exemption from registration requirements.

MicroStrategy said it plans to use the funds from the offering to increase its investment in Bitcoin and to meet the company's general operating needs based on Chairman Michael Saylor's commitment to the asset.

Conclusion Language:

With the successful issuance of this convertible senior bond, MicroStrategy not only demonstrates its firm belief in Bitcoin investment, but also reflects the company's innovative financing strategy in the capital market.

With this flexible financial instrument, MicroStrategy further solidifies its position as a major Bitcoin holder and provides a strong foundation for future growth and expansion.

Under the leadership of Michael Saylor, the company will continue to explore and leverage blockchain technology to advance the role of digital assets in corporate strategy while creating long-term value for shareholders. This issuance is not only a milestone in MicroStrategy’s financial strategy, but also an important moment in the cryptocurrency space as a whole.

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