MicroStrategy, a corporate investor in Bitcoin (BTC), is planning to sell $700 million in convertible notes, an increase from the previously announced $600 million. This move comes amidst the ongoing bull market for cryptocurrencies.
The details, disclosed on March 6, state that the 2030 MicroStrategy convertible notes will have an annual interest rate of 0.625% and a conversion price of $1,497.68 per share. This represents a premium of 21% compared to the current trading price of $1,234.48 at the time of publication.
MicroStrategy explained that holders of the notes have the option to require the company to repurchase their notes on September 15, 2028, or in the event of certain fundamental changes. The repurchase price would be equal to 100% of the principal amount of the notes, along with any accrued and unpaid interest.
These notes are only available to accredited or institutional investors. MicroStrategy has the option to redeem the notes for cash after March 22, 2027, if its common stock consistently trades above 30% of the set conversion price.
The company expects to raise $684.3 million net from the sale, or $782.0 million if purchasers exercise their options. The proceeds will be used to purchase additional Bitcoin or for corporate expenses.
Currently, MicroStrategy holds 193,000 BTC, which were acquired at an average price of $31,544. This represents a balance of $12.9 billion and a return of 112% since the Bitcoin investment began. Simultaneously, the company’s stock has seen a return of 429.2% as part of the broader Bitcoin bull market.
Michael Saylor, the chairman and co-founder of MicroStrategy, is a passionate Bitcoin enthusiast. He first incorporated the digital asset into the company’s corporate asset allocation strategy in August 2020. Since then, MicroStrategy has consistently added BTC to its corporate treasury every quarter. Saylor recently expressed his belief that artificial intelligence and exchange-traded funds will lead to a “gold rush” for Bitcoin over the next decade.
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