MicroStrategy completes its $3 billion debt offering to buy more bitcoin
2024-11-22

MicroStrategy has completed a $3 billion debt offering to buy more bitcoins, according to an announcement on Thursday. The company previously announced it would issue convertible senior notes due 2029 that paid 0% interest. 
According to the announcement, the offering was completed within three days. MicroStrategy initially sought to raise $1.75 billion but upsized the sale to $2.6 billion with an option for the initial purchasers to buy an additional $400 million in aggregate principal amount of the notes.
Despite its lack of yield, investors might consider the bond due to its conversion rate of 1.4872 shares per $1,000 principal, equating to roughly $672 per share—a 55% premium over the firm's recent stock price.
Like its previous debt offerings, MicroStrategy intends to use the funds to buy bitcoin. Investors have treated MSTR stock as a bitcoin play since the firm began investing in 2020. The firm now holds 331,200 BTC, worth over $30 billion, following its largest bitcoin purchase to date announced earlier this week. 
“Our treasury strategy is designed to provide investors varying degrees of economic exposure to Bitcoin by offering a range of securities, including equity and fixed-income instruments,” the company, which refers to itself as “the world's first and largest Bitcoin Treasury Company,” said in a statement. 
MicroStrategy has purchased its bitcoin for an average price of $49,874 per coin, for a total cost of $16.5 billion. The company disclosed plans to raise $42 billion via debt and stock offerings to purchase more bitcoin. 
MicroStrategy raised about $2.97 billion from its recent sale of convertible notes, after covering fees and expenses. Investors can later exchange these notes for cash, MicroStrategy Class A stock, or a mix of both, depending on the company’s choice.
Generally, these notes can't be converted before June 1, 2029, unless specific conditions are met. For example, if MicroStrategy's stock price climbs 30% above the conversion price by December 2026, the company can buy back the notes for their original value plus any accrued special interest.
MSTR closed down nearly 20% to $397.28 on Thursday after notable investment firm Citron Research said the company’s value has become “detached” from bitcoin fundamentals and that it has opened a short position.
MicroStrategy's stock is up nearly 500% this year, outpacing the price of bitcoin (+110%) and the S&P 500 (+25%). Bitcoin was trading around $98,200 as of press time, according to The Block's price page.
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