MicroStrategy Increases Convertible Senior Notes Offering to $2.6B to Finance Future Bitcoin Purchases

MicroStrategy has increased its offering of zero-interest convertible senior notes to $2.6 billion, up from the previously announced $1.75 billion

Bitcoin-accumulating software firm MicroStrategy has increased its offering of zero-interest convertible senior notes to $2.6 billion, up from the previously announced $1.75 billion, it said on Monday.

The company also said it planned to use a portion of the proceeds to finance future Bitcoin purchases.

MicroStrategy said it expects net proceeds of approximately $2.58 billion from the sale of the notes, or $2.97 billion if the initial purchasers exercise their full option to purchase additional notes.

The notes, due in 2029, will be sold exclusively to qualified institutional buyers and certain non-US persons in compliance with Securities Act regulations, the company said. They will be convertible into cash, MicroStrategy’s class A common stock, or a combination of both, at the company’s discretion.

The notes will be unsecured, senior obligations without regular interest, and holders may require MicroStrategy to repurchase them for cash on June 1, 2028, or upon certain fundamental change events. Starting December 4, 2026, MicroStrategy may redeem the notes for cash under specific price conditions for its class A common stock, it said.

The company said it granted initial purchasers an option to buy up to an additional $400 million in notes within a 3-day period after issuance. The offering is expected to close on November 21, 2024.

MicroStrategy has been using convertible senior notes to raise funds for its Bitcoin purchases since adopting a Bitcoin reserve strategy in 2020.

The company aims to add around $42 billion worth of Bitcoin to its portfolio over the next three years, with $21 billion through equity sales and another $21 billion through fixed-income instruments, according to its plans.

As the largest corporate holder of Bitcoin, MicroStrategy's total Bitcoin holdings now stand at 331,200 BTC, valued at over $30 billion based on current market prices.