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MicroStrategy proposed to issue $700 million of convertible senior notes, of which $500 million would be used to redeem an earlier tranche of notes.
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The remaining money can be used to buy additional bitcoins.
Nasdaq-listed bitcoin development company MicroStrategy (MSTR) announced Monday that it plans to issue $700 million aggregate principal amount of convertible senior notes due 2028.
The company plans to use the proceeds from the offering to redeem $500 million of senior secured notes with an annual yield of 6.125% due 2028, the press release said. The company will use the remainder of the proceeds to purchase additional bitcoin {{BTC}} and for general corporate use.
The company also intends to grant the initial purchasers of the notes an option to purchase up to an additional $105 million of notes within a period of 13 days from the issuance date of the initial notes. The company said it may exchange 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 reserve asset for its treasury. It has since become the largest corporate buyer of bitcoin, accumulating 244,800 BTC, worth approximately $14.2 billion at current prices. Just days ago, MicroStrategy announced the purchase of an additional $1.1 billion worth of bitcoin, giving it $900 million available under a previous offering.
Recently, other publicly traded companies, such as Semler Scientific and Japanese investment advisor Metaplanet, have followed MicroStrategy’s lead and issued debt to raise bitcoins.
MSTR shares fell 4.9% in regular trading today, alongside a significant drop in the price of bitcoin. Shares fell another 1.6% in after-hours trading. They remain up about 300% year-over-year.
