MicroStrategy (MSTR) has completed a $3 billion offering of 0% convertible senior notes due in December 2029, with plans to use a portion or all of the proceeds to buy more Bitcoin.
The business intelligence firm announced the completion as its shares retraced over 25% on Nov. 21, Google Finance data shows.
The convertible senior notes come at a 55% premium with an implied strike price of around $672 — a predetermined price at which an option holder can buy or sell MicroStrategy’s class A common stock.
Source: Michael Saylor
The 0% senior convertible note means it will not pay regular interest to bondholders. These convertibles are sold at a discount and will instead mature to face value if they are not converted prior to the maturity date.
They’re also “senior” to common stock in the sense that holders have priority in the event of bankruptcy or liquidation.
MicroStrategy could buy around 30,600 Bitcoin (BTC) if it were to spend the entire $3 billion on Bitcoin.
The $3 billion offering follows MicroStrategy’s Nov. 18 announcement to raise $1.75 billion at 0% interest, which was then increased to $2.6 billion on Nov. 20.
The offerings are part of MicroStrategy’s bold plans to raise $42 billion in the next three years to stack more Bitcoin under its “21/21” plan — consisting of $21 billion in equity and $21 billion in fixed-income securities.
MicroStrategy currently holds 331,200 Bitcoin worth over $32.7 billion — the most of any public company — according to Saylor Tracker.
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MicroStrategy (MSTR) shares fell over 25% from its highest point of $536.7 to $397.28 when the closing bell rang on Nov. 21.
MSTR’s change in share price on Nov. 21, including a 5.3% recovery in after-hours trading. Source: Google Finance
The fall came as Cirtron Research revealed it hedged a short position on MSTR, suggesting MSTR shares have become “overheated and that its volume has “completely detached from BTC fundamentals.”
MSTR is still one of the best performers in the US markets in 2024, up 480% year-to-date.
It was the second most-traded stock in the US on Nov. 20 as more investors weighed up the bull case and risks of Bitcoin exposure through MSTR.
Michael Saylor’s firm contributed to a record-setting $70 billion trading volume on Nov. 21 from the “Bitcoin Industrial Complex” — consisting of US spot Bitcoin exchange-traded funds and Bitcoin-related stocks like MSTR and Coinbase (COIN).
Bitcoin is currently priced at $98,423 — about 1.5% off cracking the $100,000 milestone, CoinGecko data shows.
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