MicroStrategy has recently revealed its plans to issue $500 million in convertible senior notes set to mature in 2032.
This private offering, which targets qualified institutional buyers, will comply with Rule 144A of the Securities Act of 1933 and is dependent on market conditions and other factors.
The main purpose of the net proceeds, as stated in a press release, will be to further invest in Bitcoin (BTC) and for general corporate uses. This move is in line with MicroStrategy’s overarching strategy to utilize BTC as its treasury reserve asset.
In addition to the initial offering, the company anticipates giving the initial purchasers of the notes the opportunity to acquire an extra $75 million in aggregate principal amount of the notes. The specific details of the notes, including the interest rate, initial conversion rate, and other terms, will be determined at the time of pricing of the offering.
The press release also highlighted that the notes will be offered and sold to qualified purchasers under Rule 144A of the Securities Act of 1933. Consequently, the convertible senior notes and any convertible shares of MicroStrategy’s class A common stock will not be officially registered with the Securities and Exchange Commission (SEC), meaning they cannot be traded in public markets without meeting specific legal requirements.
Overall, this strategic move by MicroStrategy underscores its commitment to utilizing BTC as a key asset in its corporate strategy, despite regulatory considerations and market conditions.