YEREVAN (CoinChapter.com) — MicroStrategy Incorporated (Nasdaq: MSTR) has announced a major financial decision. On June 13, 2024, the company revealed plans to offer $500 million in convertible senior notes. This private offering is aimed at qualified institutional buyers under Rule 144A of the Securities Act of 1933, subject to market conditions and other factors.
Additionally, MicroStrategy may grant the initial purchasers an option to buy up to an additional $75 million in notes. This option is available within 13 days from the initial issuance date. The offering’s completion depends on market and other conditions.
Key Details of the Convertible Senior Notes
The notes will be unsecured and mature on June 15, 2032, unless repurchased, redeemed, or converted earlier. Subsequently, they will bear interest, payable semi-annually in arrears, on June 15 and December 15 each year, starting December 15, 2024. MicroStrategy can redeem the notes for cash, in whole or in part, on or after June 20, 2029. If fewer than all notes are redeemed, at least $75 million in notes must remain outstanding.
Moreover, holders can require MicroStrategy to repurchase any portion of their notes for cash. The notes can be converted into cash, shares of MicroStrategy’s class A common stock, or a combination of both, at MicroStrategy’s choice. Before December 15, 2031, conversion is allowed only under specific conditions. After this date, conversion can occur until two trading days before maturity. The interest rate, initial conversion rate, and other terms will be set at the offering’s pricing.
Notably, the notes and shares issuable upon conversion will not be registered under the Securities Act or other securities laws. They cannot be offered or sold in the U.S. without registration or an exemption. The offering will be made only through a private offering memorandum.
About the Company
MicroStrategy (Nasdaq: MSTR) is a publicly-traded company focused on advancing the Bitcoin network through financial market activities, advocacy, and technology innovation. Moreover, the company uses proceeds from equity and debt financings to accumulate bitcoin as its primary treasury reserve. MicroStrategy also develops AI-powered enterprise analytics software and bitcoin applications. The proceeds from the recent notes sale will fund additional bitcoin acquisitions and general corporate purposes. MicroStrategy and Intelligence Everywhere are trademarks of MicroStrategy Incorporated in the U.S. and other countries.
