MicroStrategy To Raise $500M To Boost Bitcoin Holdings

BY Benzinga | CORPORATE | 06/13/24 10:14 AM EDT

MicroStrategy (MSTR) on Thursday announced plans to issue $500 million in convertible senior notes due in 2032.

What Happened: The proceeds from this offering will be used to acquire more Bitcoin (CRYPTO: BTC) and fund other corporate activities, the company stated.

The proposed notes will be unsecured and senior obligations of MicroStrategy (MSTR), with interest payments made semi-annually on June 15 and Dec. 15 each year, starting Dec. 15, 2024.

The offering’s completion is contingent on market conditions, and there is no certainty regarding the timing or terms.

Additionally, MicroStrategy (MSTR) retains the option to redeem all or part of the notes for cash beginning June 20, 2029, subject to certain conditions.

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The offering will be available to institutional buyers deemed qualified under Rule 144A of the Securities Act of 1933, allowing them to participate in the private placement.

MicroStrategy (MSTR) is currently the largest publicly traded bitcoin holder, with a total of 214,400 BTC valued at over $14 billion.

The company began its Bitcoin accumulation strategy in 2020, adopting the cryptocurrency as a reserve asset.

This announcement aligns with MicroStrategy’s ongoing commitment to expanding its Bitcoin holdings, reinforcing its position as a leader in cryptocurrency investments among publicly traded companies.

What’s Next: For further insights into the evolving digital assets landscape and the implications of such significant moves by major companies, the upcoming Benzinga Future of Digital Assets event on Nov. 19 will provide a valuable platform.

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Image: Shutterstock

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.