MicroStrategy Uplifts Debt Offering to $700M for More Bitcoin Acquisitions
Summary:
MicroStrategy, the U.S. software technology company, has increased its latest debt offering to $700 million, due 2032, up from the initially announced $500 million. The company publicly stated that it intends to use the proceeds from this private offering to buy more Bitcoin (BTC). According to its Q1 2024 financial report, MicroStrategy has amassed over 214,400 BTC, with an estimated value of $14 billion to date. The company projects net earnings from the sale to be around $687.8 million, which could rise to approximately $786 million if the initial purchasers exercise their option to purchase additional notes.
U.S. software technology company MicroStrategy has disclosed details on its newest debt offering of $700 million that will mature in 2032, earmarking the proceeds for additional Bitcoin purchases. As per the company's official announcement, the notes will be privately marketed to eligible institutional buyers under Rule 144A of the Securities Act of 1933. This latest offering saw a hike from the initially cited figure of $500 million. The company aims to use some of the revenue to augment its Bitcoin (BTC) reserves. To date, MicroStrategy has amassed 214,400 BTC, equivalent to around $14 billion according to the data issued in its Q1 2024 financial performance report.
The terms and conditions of the private offering stipulate that the notes, unsecured senior liabilities of MicroStrategy, will yield an annual interest rate of 2.25%, settled semi-annually on 15th June and 15th December each year. These notes are slated to reach maturity by June 15, 2032, unless there is earlier buyback, conversion or redemption. “Subject to some stipulations, MicroStrategy may recall for cash any or all of the notes at a redemption cost equal to 100% of the principal amount of the notes redeemed” starting from June 20, 2029.
As for the use of revenue, MicroStrategy projects that the net earnings from the sale would hover around $687.8 million — after factoring in the initial purchasers' discounts, commissions, and estimated offering costs. Should the initial purchasers exercise their option to acquire additional notes in their entirety, the total earnings could potentially hit roughly $786 million. “MicroStrategy plans to utilize the net earnings from the sale of the notes to purchase more Bitcoin and for overall corporate purposes,” the company said.
This decision by MicroStrategy on June 14 is hot on the heels of its announcement a day earlier to raise $500 million via a similar offering. The upward revision to $700 million aligns with the enterprise’s bold strategy to bolster its BTC assets and solidify its position in the crypto space.
Notably, the notes being sold under Rule 144A of the Securities Act 1933 signifies that they will not be officially registered with the United States Securities and Exchange Commission (SEC). Notes traded under Rule 144A cannot be publicly bought or sold without adhering to the SEC’s legal requirements.
Published At
6/14/2024 4:23:07 PM
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