MicroStrategy Raises its Convertible Note Offering to $700M

MicroStrategy has boosted its offering of convertible senior notes from $500 million to $700 million. These notes will accrue 2.25% annual interest and mature in 2032.

Investors have the option to convert them into MicroStrategy stock, with an initial conversion rate set at 0.4894 shares per $1,000 of notes.

This equates to a conversion price of approximately $2,043.32 per share, 35% higher than the stock’s average trading price on June 13, 2024.

This conversion option adds potential value if the stock price of MicroStrategy increases. Interest will be paid semi-annually, beginning on December 15, 2024, and the notes will reach maturity on June 15, 2032.

However, MicroStrategy has the option to buy back the notes for cash if its stock price reaches 130% of the conversion price by June 20, 2029.

It is expected that this offering will raise approximately $687.8 million for the company, or up to $786 million if the additional notes are purchased, to invest in more Bitcoin for its treasury.