MicroStrategy Announces Increase in Convertible Debt Offering to $2.6 Billion
MicroStrategy has decided to increase its convertible debt offering to $2.6 billion, a significant jump from its original target of $1.75 billion. This decision was confirmed in a statement released on Nov. 20.
Utilization of Proceeds
The company has stated that the funds raised from this offering will be used for additional Bitcoin acquisitions as well as other corporate requirements.
Details of the Offering
The convertible notes will be privately sold to institutional buyers following Rule 144A of the Securities Act of 1933, and to select non-US investors under Regulation S. MicroStrategy has also provided buyers with a three-day option to purchase an additional $400 million in notes.
- The notes are unsecured senior obligations with a maturity date of Dec. 1, 2029.
- They do not accrue regular interest, and the principal amount does not accrete.
The initial conversion rate for these notes is set at 1.4872 shares of MicroStrategy Class A stock per $1,000 of principal, translating to a conversion price of $672.40 per share. This rate represents a 55% premium compared to the average price of $433.80 on Nov. 19. The conversion terms are subject to adjustment based on specific events.
MicroStrategy anticipates that the net proceeds from the offering will amount to $2.58 billion after expenses. However, if buyers choose to fully exercise the additional purchase option, the proceeds could climb to $2.97 billion.
MicroStrategy Climbs into the Top 100 Public Companies
MicroStrategy’s recent surge has propelled it into the top 100 US publicly traded companies, currently holding the 97th position according to CompaniesMarketCap data.
This remarkable achievement can be attributed to the company’s impressive stock performance, which has surged by approximately 100% in the past month, reaching a two-decade high of over $430. This outstanding performance has positioned MicroStrategy favorably against high-performing stocks of AI giants like Nvidia.
Early market indicators suggest that this positive trend is continuing, with the firm’s pre-market trading showing an 8% increase, as per Google Finance data.
Leading the Corporate Bitcoin Adoption
MicroStrategy remains at the forefront of corporate Bitcoin adoption, holding over 330,000 BTC valued at more than $30 billion. Throughout this year, the company has added nearly 150,000 BTC to its holdings, reinforcing its position as a key player in corporate Bitcoin adoption.
