MicroStrategy Completes $3M Note Offering to Acquire More Bitcoin, But MSTR Dumps 16%

Michael Saylor has announced that MicroStrategy successfully raised $3 billion through a convertible senior note offering.

According to the company’s executive chairman, the offer carries a 0% coupon rate and a 55% premium, setting the implied exercise price at about $672 per share.

$3 billion convertible note offering

In an accompanying press release, MicroStrategy explained that the proceeds from the sale will be used to purchase additional Bitcoins and for general corporate purposes. The $3 billion offering consists of convertible senior notes due 2029. It also includes $400 million in additional notes, purchased through an option exercised by the initial purchasers on November 20, 2024.

The notes are unsecured and will not accrue regular interest. They may also be converted into cash, MicroStrategy Class A common stock, or a combination of the two. The initial conversion rate is 1.4872 shares per $1,000 of principal, reflecting a 55% premium to the average share price on November 19, 2024.

In addition, while they expire on December 1, 2029, MicroStrategy may redeem them as early as December 4, 2026, under certain conditions. Holders may also require the Company to repurchase them on June 1, 2028 or upon the occurrence of specified events.

After all deductions, the net proceeds of the offering amount to approximately $2.97 billion. The latest offering is part of the business intelligence firm’s larger goal of raising $42 billion over the next three years to fund its Bitcoin acquisition strategy, known as the “21/21” plan “.

The plan aims to raise $21 billion in equity and $21 billion in fixed income securities, all of which will increase the company’s Bitcoin holdings.

Position of Microstrategy

MicroStrategy’s adoption of Bitcoin was initially a hedge against macroeconomic instability, but the company has since committed to aggressively building a reserve based on the cryptocurrency.

Since its switch to the asset in 2020, the software company has become a leader in Bitcoin’s corporate treasury model. According to data from Bitcoin Treasuries, the company currently holds 331,200 coins worth more than $32.7 billion, making it the largest holder of publicly traded BTC.

His most recent Bitcoin purchases include a massive purchase of 51,780 BTC worth over $4.5 billion and an earlier purchase of 27,200 BTC valued at over $2 billion.

On November 19, 2024, MicroStrategy also made headlines, achieving $21.8 billion in trading volume. In doing so, the company beat the combined volumes of major tech companies like Apple ( AAPL ), Amazon ( AMZN ) and Meta ( META ).

However, MSTR launched strongly after the news was announced. It fell 16% daily from over $530 to under $400 per share.

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