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Michael Saylor's MicroStrategy Plans Another $700M Convertible Note Issuance
The company just days ago announced the purchase of $1.1 billion worth of bitcoin, bringing its holdings to 244,800 tokens.
Updated Sep 17, 2024, 8:36 p.m. Published Sep 16, 2024, 8:55 p.m.
- MicroStrategy proposed to issue $700 million of convertible senior notes, with $500 million to be used to redeem a previous tranche of notes.
- The remainder of the money could be used to buy additional bitcoin.
Nasdaq-listed bitcoin development firm MicroStrategy (MSTR) announced Monday that it intends to offer $700 million aggregate principal amount of convertible senior notes due 2028.
The company plans to use the proceeds of the offering to redeem $500 million worth of senior secured notes with 6.125% annual yield maturing in 2028, the press release said. It will use the rest of the proceeds to purchase more bitcoin and for general corporate uses.
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The firm also plans to grant to the initial purchasers of the notes an option to buy up to an additional $105 million aggregate principal amount of notes within a 13-day period starting on the issuance date of the first notes. The company said it may redeem for cash all or a portion of the notes on or after December 20, 2027, subject to certain conditions.
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The company, led by Executive Chairman Michael Saylor, started purchasing bitcoin in 2020, adopting it as a reserve asset for its treasury. Since then, it has become the largest corporate buyer of bitcoin, accumulating 244,800 BTC, worth roughly $14.2 billion at current prices. Only days ago, MicroStrategy disclosed the purchase of an additional $1.1 billion worth of bitcoin, leaving it with $900 million available under a previous offering.
Recently, other public companies such as Semler Scientific and Japanese investment adviser Metaplanet have followed MicroStrategy's footprints to issue debt to accumulate bitcoin.
MSTR shares slid 4.9% during regular trading today alongside a sizable decline in the price of bitcoin. Shares are down another 1.6% in after hours trading. They remain higher by about 300% on a year-over-year basis.
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