MicroStrategy to Sell $500 Million in Stock for Bitcoin
13 Jun, 2024 ● Coin news
MicroStrategy has revealed plans to issue $500 million in convertible senior notes due 2032.
This private offering, aimed at qualified institutional buyers, will comply with Rule 144A under the Securities Act of 1933, contingent upon market conditions and other factors.
“The notes will be unsecured, senior obligations of MicroStrategy and will bear interest payable semi-annually in arrears on June 15 and December 15 of each year, beginning on December 15, 2024.
The notes will mature on June 15, 2032, unless earlier repurchased, redeemed or converted in accordance with their terms.”
A press release stated that the primary use of the net proceeds would be to purchase additional Bitcoin and for general corporate purposes, aligning with MicroStrategy’s strategy to utilize BTC as its primary treasury reserve asset.
Additionally, the company anticipates offering the initial buyers of the notes an option to purchase up to an additional $75 million in notes.
“If MicroStrategy redeems fewer than all the outstanding notes, at least $75 million aggregate principal amount of notes must be outstanding and not subject to redemption as of the relevant redemption notice date.”
The press release also notes that "the interest rate, initial conversion rate, and other terms of the notes will be determined at the time of pricing of the offering."
“MicroStrategy expects that the reference price used to calculate the initial conversion price for the notes will be the U.S. composite volume weighted average price of MicroStrategy’s class A common stock from 9:30 am through 4:00 pm EDT on the date of pricing.”
The release further specifies that the notes will be offered under Rule 144A of the Securities Act of 1933 to qualified purchasers.
This arrangement indicates that the convertible senior notes and any shares of MicroStrategy’s class A common stock resulting from conversion will not be registered with the Securities and Exchange Commission (SEC), meaning they cannot be publicly traded on stock exchanges without fulfilling certain legal prerequisites.
Sources:
https://cointelegraph.com/news/microstrategy-raise-500-million-stock-buy-bitcoin
