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Michael Saylor's MicroStrategy Prices Upsized $525M Debt Offering to Buy More Bitcoin
This capital raise comes just days after a similarly structured $800 million offering, the proceeds of which the company used to purchased another 12,000 bitcoin.
Updated Mar 15, 2024, 1:03 p.m. Published Mar 15, 2024, 1:01 p.m.
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Self-described Bitcoin development company MicroStrategy (MSTR) is set to add to its 205,000 bitcoin stack after pricing a $525 million convertible debt offering.
The private placement was upsized from an originally planned $500 million and the purchasers were granted an option to buy up to an additional $78.5 million of the paper, meaning proceeds are likely to be in the $600 million area.
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The convertible senior notes will have an interest rate of 0.875% per annum compared to 0.625% in a sale of $800 million of similar debt that took place just days ago. The conversion rate of the new notes will be equivalent to $2,327.31 per share, representing a premium of approximately 40% on MSTR's Thursday average price of $1662.20.
Read more: MicroStrategy Acquires 12,000 More BTC With Convertible Senior Notes Proceeds
MSTR shares dropped 5% on Thursday as bitcoin declined below $70,000. Shares are lower by 3.3% in premarket action alongside a continued fall in bitcoin, now trading at $67,700.
Read More: 'Bitcoin Is Going to Eat Gold': MicroStrategy’s Michael Saylor
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Strategy's STRC returns to $100, poised to unlock more bitcoin accumulation
The perpetual preferred STRC hits $100 par amid bitcoin downturn, enabling potential further BTC purchases for the company.
What to know:
- Stretch (STRC) reclaimed its $100 par value for the first time since mid-January, a move that enables Strategy (MSTR) to resume at-the-market offerings for additional bitcoin purchases.
- The preferred equity stabilized near par despite recent bitcoin volatility, supported by a monthly dividend rate that Strategy recently increased to 11.25%.
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