MicroStrategy has effectively finalized a $3 billion offering of zero percent convertible senior notes, which are set to mature in December 2029. The technology company intends to utilize some or all of the proceeds to acquire additional Bitcoin . Recent data indicates that the company’s stock experienced a significant decline of over 25% on November 21.
These convertible senior notes are being issued at a 55% premium, translating to an implied strike price of approximately $672. This means that the notes are linked to MicroStrategy’s class A common stock, allowing investors to buy or sell shares at this predetermined price. Notably, the zero percent notes will not be making regular interest payments; they are sold at a discount and will only mature to their face value if not converted by the designated time. Moreover, these notes hold a superior claim over common stock, granting their holders priority in scenarios of bankruptcy or liquidation.
Should MicroStrategy allocate the entire $3 billion toward Bitcoin purchases, it could potentially acquire around 30,600 BTC. This move follows the company’s recent announcement on November 18, where it initially aimed to raise $1.75 billion via the same method, later increasing the target to $2.6 billion on November 20. These financing activities align with MicroStrategy’s ambitious strategy to amass a total of $42 billion over the next three years to enhance its Bitcoin reserves as part of its “21/21” initiative.
Currently, MicroStrategy owns approximately 331,200 Bitcoins valued at over $32.7 billion, making it the largest Bitcoin holder among public companies. Although MSTR shares saw a notable drop from a peak of $536.7 to $397.28 by the end of November 21, the stock is still among the top performers in 2024, having soared by 480% year-to-date. This volatility coincided with major trading activity related to Bitcoin equities, contributing to a substantial $70 billion trading volume attributed to popular Bitcoin exchange-traded funds and stocks like MicroStrategy. As Bitcoin continues to near a milestone price of $100,000, investor interest remains high.
