MicroStrategy is set to offer $500 million in convertible senior notes in order to expand its Bitcoin holdings, as announced on June 13. The company plans to issue these notes maturing in 2032 to raise funds for acquiring more Bitcoin and fulfilling other corporate needs.
The notes, which will be unsecured senior obligations of MicroStrategy, will involve interest payments twice a year starting from December 15, 2024. The completion of the offering is subject to market conditions, and the company may choose to redeem all or part of the notes for cash from June 20, 2029.
This private offering is aimed at qualified institutional buyers and allows investors to convert the notes into cash, MicroStrategy’s class A common stock, or a combination of both. The terms for conversion, including the rate and price, will be determined at the time of pricing.
The company’s chairman, Michael Saylor, remains committed to Bitcoin as a strategic asset, with MicroStrategy currently holding 214,400 BTC valued at over $14 billion. The company began accumulating Bitcoin in 2020 and continues to strengthen its holdings through strategic investments.
Despite reporting a net loss of $53.1 million for the first quarter of 2024, largely due to impairment losses on digital assets, MicroStrategy remains focused on expanding its Bitcoin portfolio. The company’s revenue declined while operating expenses increased significantly, but its Bitcoin holdings have grown substantially.
MicroStrategy’s CFO, Andrew Kang, highlighted the company’s successful capital raising efforts, which have supported its Bitcoin acquisition strategy. The approval of spot Bitcoin ETFs in the U.S. has also contributed to Bitcoin’s price appreciation and increased institutional demand.
However, the company faces significant short positions valued at nearly $7 billion, which have impacted its position in the market. Despite this, MicroStrategy remains committed to its Bitcoin investment strategy and continues to navigate the evolving cryptocurrency landscape.
