MicroStrategy, the business intelligence firm and corporate bitcoin holder, has upsized its latest convertible senior note offering to $2.6 billion from the previously announced $1.75 billion.
The firm intends to use the net proceeds from the offering to “acquire additional bitcoin and for general corporate purposes.”
Subject to market conditions and other factors, the notes, due 2029, will be issued in a private offering to qualified institutional investors, the company said in a statement. They are unsecured, bear 0% interest and are convertible into cash, MicroStrategy class A common stock, or both, at the firm’s election.
MicroStrategy also provided the initial purchasers of the notes a three-day option, starting on the issuance date, to purchase up to an additional $400 million in aggregate principal amount of the notes, with the offering expected to close on Nov. 21.
MicroStrategy estimates that the net proceeds from the sale of the notes will generate approximately $2.58 billion after expenses, or $2.97 billion if initial purchasers exercise their full option to buy additional notes.
The convertible notes provide flexibility for MicroStrategy to manage its debt while potentially benefiting from equity appreciation. MicroStrategy has continued to invest heavily in bitcoin since 2020, reflecting its strategy of using debt financing to expand its bitcoin holdings.
MicroStrategy’s bitcoin acquisition spree
On Monday, MicroStrategy announced it had acquired another 51,780 BTC for approximately $4.6 billion at an average price of $88,627 per bitcoin between Nov. 11 and Nov. 17.
The company now holds 331,200 BTC, worth roughly $29.7 billion. MicroStrategy’s total holdings were bought at an average price of $49,874 per bitcoin, a total cost of around $16.5 billion, including fees and expenses, according to the company’s co-founder and executive chairman, Michael Saylor.
This latest set of acquisitions is the largest in dollar terms to date, funded through the sale of nearly 13.6 million shares as part of its larger $42 billion capital raise plans for future bitcoin purchases.
MicroStrategy’s share price is currently up 6.3% in pre-market trading at around $458, according to TradingView. The stock has gained more than 117% over the past month and 521% year-to-date.
MSTR/USD price chart. Image: TradingView.
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