MicroStrategy, a company listed on the Nasdaq exchange under the ticker symbol MSTR, has made a significant financial announcement. On June 13, 2024, the company unveiled its plans to offer $500 million in convertible senior notes. This private offering is targeted towards qualified institutional buyers in accordance with Rule 144A of the Securities Act of 1933, subject to various market conditions and other factors.
In addition to the initial offering, MicroStrategy may also provide the initial purchasers with an option to acquire up to an additional $75 million in notes within 13 days of the initial issuance date. The completion of the offering is contingent upon market conditions and other factors.
The convertible senior notes will be unsecured and will mature on June 15, 2032, unless repurchased, redeemed, or converted earlier. Interest will be paid semi-annually in arrears on June 15 and December 15 each year, starting from December 15, 2024. MicroStrategy retains the right to redeem the notes for cash, either in full or in part, on or after June 20, 2029. If a partial redemption is made, at least $75 million worth of notes must remain outstanding.
Holders of the notes will have the option to require MicroStrategy to repurchase a portion of their notes for cash. The notes can be converted into cash, shares of MicroStrategy’s class A common stock, or a combination of both at the discretion of MicroStrategy. Certain conditions apply to the conversion process until December 15, 2031, after which conversion can take place until two trading days before maturity. The terms such as interest rate and initial conversion rate will be determined at the offering’s pricing.
It is important to note that the notes and shares issued upon conversion will not be registered under the Securities Act or other securities laws, hence cannot be sold in the U.S. without registration or an exemption. The offering will be conducted exclusively through a private offering memorandum.
MicroStrategy, an advocate for advancing the Bitcoin network through financial market activities, advocacy, and technology innovation, also develops AI-powered enterprise analytics software and Bitcoin applications. The funds raised from the recent notes sale will be used for additional Bitcoin acquisitions and general corporate purposes. MicroStrategy and Intelligence Everywhere are trademarks of MicroStrategy Incorporated in the U.S. and other countries.
