MicroStrategy, a major corporate investor in Bitcoin (BTC), is planning to sell $700 million in convertible notes as the cryptocurrency market continues to thrive. The company recently announced this increase from the initial $600 million. The 2030 MicroStrategy convertible notes will have an annual interest rate of 0.625% and a conversion price of $1,497.68 per share, which is a 21% premium compared to its current trading price of $1,234.48.
MicroStrategy stated that note holders have the option to request the repurchase of their notes on September 15, 2028, or in the event of certain fundamental changes. The repurchase price will be 100% of the principal amount of the notes, along with any accrued and unpaid interest. These notes are only available to accredited or institutional investors. If MicroStrategy’s common stock consistently trades above 30% of the conversion price, the company may redeem the notes for cash after March 22, 2027.
The sale of these notes is expected to raise $684.3 million net, or $782.0 million if purchasers exercise their options. MicroStrategy plans to use the proceeds to acquire more Bitcoin or cover corporate expenses. Currently, the company holds 193,000 BTC, which were purchased at an average price of $31,544. This represents a balance of $12.9 billion and a return of 112% since the acquisition. Additionally, MicroStrategy’s stock has seen a 429.2% return as part of the broader Bitcoin bull market.
Michael Saylor, chairman and co-founder of MicroStrategy, is a passionate supporter of Bitcoin. He first introduced the digital asset into the company’s corporate asset allocation strategy in August 2020. Since then, MicroStrategy has been consistently adding BTC to its corporate treasury every quarter. During a panel discussion at the Bitcoin Atlantis conference on March 1, Saylor expressed his belief that artificial intelligence and exchange-traded funds will lead to a decade-long “gold rush” for Bitcoin.