The NASDAQ-listed business intelligence company has surpassed its previous plans to offer $400 million in convertible notes. Instead, the firm announced today that it has raised $650 million via a senior convertible notes offering and asserted that the proceeds with be invested in bitcoin.
- The official announcement reads that “the aggregate principal amount of the notes sold in the offering was $650 million, which includes notes issuable pursuant to an option to purchase.”
- Although the company failed to disclose the names of the participants in the purchase, it said that the notes were sold in a private offering to qualified institutional buyers.
- These notes represent unsecured senior obligations of MicroStrategy and bear interest rate of 0.750% per annum. They are payable semi-annually in arrears on June 15th and December 15th of each year, starting from 2021. The notes will mature on December 15th, 2025, unless “earlier repurchased, redeemed, or converted in accordance with their terms.”
- It’s worth noting that holders of these notes may require MicroStrategy to repurchase them in case of a “fundamental change.” The repurchase price would equal to 100% of the principal amount of the notes.
- The net proceeds from the sale will be approximately $635 million after deducting the initial purchaser’s discounts and commissions.
- MicroStrategy plans to use this amount to invest in bitcoin in accordance with the company’s recently updated Treasury Reserve Policy.
- Should the company indeed proceeds and buys more bitcoin, its total investment could rise above $1 billion after the massive purchases earlier this year.