Michael Saylor’s MicroStrategy Plans Another $700M Convertible Note Issue

• MicroStrategy proposed to issue $700 million of convertible senior notes, with $500 million to be used to repurchase an earlier tranche of notes.

• The rest of the money could be used to buy additional bitcoins.

Nasdaq-listed Bitcoin development firm MicroStrategy ( MSTR ) announced Monday that it plans to offer an aggregate of $700 million of convertible senior notes due 2028.

The company plans to use the proceeds from the offering to repurchase $500 million in senior secured notes with an annual yield of 6.125 percent due 2028, the press release said. It will use the rest of the proceeds to buy more bitcoin {{BTC}} and for general corporate uses.

The firm also intends to grant initial purchasers of the notes an option to purchase up to an additional aggregate amount of up to $105 million of notes within a 13-day period from the date of issuance of the first notes. The company said it may redeem all or a portion of the notes for cash on or after December 20, 2027, subject to certain conditions.

The company, led by executive chairman Michael Saylor, began buying bitcoin in 2020, adopting it as a backup asset for its treasury. Since then, he has become the largest corporate buyer of bitcoin, amassing 244,800 BTC, worth about $14.2 billion at current prices. Just a few days ago, MicroStrategy revealed the purchase of another $1.1 billion worth of bitcoin, leaving it with $900 million available from a previous offering.

Recently, other public companies such as Semler Scientific and Japanese investment advisor Metaplanet have followed in MicroStrategy’s footsteps to issue debt to accumulate bitcoin.

Shares of MSTR fell 4.9% during regular trading today, along with a significant drop in the price of bitcoin. Shares fell another 1.6 percent in after-hours trading. They remain about 300% higher year-on-year.