U.Today – MicroStrategy, the business intelligence firm led by Michael Saylor, announced the pricing of its latest debt offering. The company plans to raise $700 million through the issuance of convertible senior notes due in 2032 to purchase additional and cover general corporate expenses, according to a novel press release.
The move follows an earlier announcement to raise $500 million, indicating robust investor demand has allowed MicroStrategy to enhance its offering.
The convertible notes will bear an interest rate of 2.25% per annum, payable semi-annually on June 15 and December 15, commencing on December 15, 2024. They will mature on June 15, 2032, unless they are repurchased earlier, redeemed or converted.
MicroStrategy retains an option to convert the notes into cash after June 20, 2029, subject to certain conditions, provided the company’s Class A common stock reaches certain price thresholds.
Investors will have the option to convert the bonds into cash, shares of MicroStrategy’s Class A common stock, or a combination of both. The initial conversion rate was set at approximately 0.4894 MSTR shares per $1,000 par value bond, which translates to an initial conversion price of approximately $2,043.32 per share. This price represents a 35% premium over the company’s recent share price.
MicroStrategy estimates that the net proceeds from the offering will be approximately $687.8 million, or as much as $786 million if initial purchasers exercise their option to purchase additional notes. The sale will be conducted privately to qualified institutional investors only.
