TYSONS CORNER, Va. - MicroStrategy Incorporated (NASDAQ:MSTR) has upsized its private offering to $700 million in convertible senior notes due 2030, with an increase from the previously announced $600 million. The offering is set to close on March 8, 2024, subject to customary closing conditions.
The notes, bearing a 0.625% interest rate per annum, will be payable semi-annually and mature on March 15, 2030, unless earlier repurchased, redeemed, or converted. MicroStrategy may choose to redeem the notes for cash after March 22, 2027, under certain conditions, and has also given initial purchasers an option to buy an additional $100 million in notes within a 13-day period starting from the issuance date.
Convertible into MicroStrategy's class A common stock or cash, or a combination thereof at the company's discretion, the notes will initially have a conversion rate of 0.6677 shares per $1,000 principal amount, which is about a 42.5% premium over MicroStrategy's last reported stock price as of March 5, 2024.
MicroStrategy anticipates net proceeds of approximately $684.3 million, or $782.0 million if the additional notes option is fully exercised, after deductions. The company plans to use these proceeds to acquire more bitcoin and for general corporate purposes.
The notes are being sold to qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended, and will not be registered under the Securities Act or any state securities laws. Therefore, they may not be offered or sold in the U.S. without registration or an applicable exemption from registration requirements.
MicroStrategy identifies itself as the world's first Bitcoin development company and aims to further Bitcoin network development through various activities in the financial markets, advocacy, and technology innovation. It also develops AI-powered enterprise analytics software and is working on developing Bitcoin applications.
This article is based on a press release statement, and the information provided is factual as of the press release date. The offering of the notes is only being made through a private offering memorandum.
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