The convertible notes, due 2029, carry a 55% premium with a US$672 implied strike price. They offer no regular interest payments but give noteholders priority over stockholders in case of bankruptcy.
The company plans to use a portion of the proceeds to purchase additional Bitcoin, as the cryptocurrency’s value continues to climb and nears the US$100,000 milestone on November 22..
Despite the recent 25% decline in MSTR’s stock price on November 21, the company remains committed to its Bitcoin investment strategy. The convertible bonds offer a 0% interest rate and a 55% premium, with a predetermined conversion price of US$672 per share.
$MSTR has completed a $3 billion offering of convertible notes at 0% coupon and 55% premium, with an implied strike price of ~$672. https://t.co/GzO0br0Xfh
— Michael Saylor⚡️ (@saylor) November 21, 2024
With the additional funds, MicroStrategy could potentially acquire around 30,600 Bitcoin. This latest fundraising effort is part of the company’s ambitious “21/21” plan, which aims to raise US$42 billion over the next three years to increase its Bitcoin holdings.
Currently, MicroStrategy holds 331,200 Bitcoin valued at US$32.7 billion, making it the largest public holder of the cryptocurrency. However, recent criticisms from Cirtron Research, which highlighted the overheating of MSTR shares and their detachment from Bitcoin fundamentals, have contributed to the recent price decline.
Despite the volatility, MSTR remains a top performer in 2024, with a year-to-date gain of 480%. The stock was the second most-traded US security on November 20, contributing to a record US$70 billion in “Bitcoin Industrial Complex” trading volume. The company’s aggressive Bitcoin strategy has attracted significant investor interest, as evidenced by its high trading volume.
