MicroStrategy Completes Convertible Notes Offering and Purchases $458M Bitcoin
On September 19, 2024, MicroStrategy Incorporated announced the successful completion of its offering of 0.625% convertible senior notes, raising a total of $1.01 billion. The firm plans to allocate a significant portion of the proceeds towards expanding its Bitcoin holdings and repaying existing debt.
MicroStrategy Completes $1.01 Billion Upsized Offering of Convertible Notes at 0.625% Coupon and 40% Conversion Premium. $MSTRhttps://t.co/mJK5xwyn4S
According to the press release from MicroStrategy, the convertible notes have an aggregate principal amount of $1.01 billion, which includes $135 million from an option exercised by initial purchasers. The notes are unsecured, with an annual interest rate of 0.625%, payable semi-annually starting March 15, 2025. Notably, the notes will mature on September 15, 2028.
Michael Saylor, Co-Founder and Executive Chairman of MicroStrategy, stated, “This offering underscores our commitment to leveraging financial instruments to enhance our Bitcoin portfolio while managing debt effectively.”
Proceeds and Usage
The net proceeds from the offering are approximately $997.4 million after deducting fees and expenses. MicroStrategy intends to use these funds primarily to redeem $500 million in senior secured notes, scheduled for redemption on September 26, 2024. This redemption will also release collateral, including around 69,080 Bitcoin (BTC).
MicroStrategy has acquired 7,420 BTC for ~$458.2 million at ~$61,750 per #bitcoin and has achieved BTC Yield of 5.1% QTD and 17.8% YTD. As of 9/19/2024, we hodl 252,220 $BTC acquired for ~$9.9 billion at ~$39,266 per bitcoin. $MSTRhttps://t.co/JUtgztpzBu
In a recent SEC filing, MicroStrategy disclosed that between September 13 and 19, it acquired approximately 7,420 BTC for $458.2 million, at an average price of $61,750 per Bitcoin. “We remain committed to our aggressive acquisition strategy,” Saylor added.
Current Bitcoin Holdings
With the recent acquisitions, MicroStrategy’s total Bitcoin holdings have increased to approximately 259,640 BTC. This positions the company as one of the largest corporate holders of Bitcoin globally. The firm’s overall investment in Bitcoin has reached approximately $14.14 billion.
Saylor commented on the firm’s performance, noting that MicroStrategy has achieved a Bitcoin yield of 4.4% for the quarter and 17% year to date. This success reflects the company’s ongoing strategy to leverage debt to expand its cryptocurrency portfolio.
Conclusion
MicroStrategy’s recent offering and subsequent Bitcoin purchases illustrate its aggressive strategy in the cryptocurrency market. By utilising convertible notes to raise capital, the company continues to solidify its position as a leader in corporate Bitcoin holdings. As Saylor stated, “Our commitment to Bitcoin remains unwavering, and we are excited about the future.”
