MicroStrategy plans sale of $600m in convertible senior notes to buy more Bitcoin

MicroStrategy plans to sell $600 million in senior convertible notes to fund Bitcoin purchases.
This is its second announced $600 million bond sale in less than a month.
MicroStrategy stock rose as high as 25% on Monday as Bitcoin pushed closer to all-time highs.

MicroStrategy plans to use a $600 million bond sale to buy more Bitcoin and handle “general corporate purposes,” the business intelligence firm announced on Monday.

This is the second sale of $600 million in convertible senior notes announced by the firm in less than a month.

MicroStrategy is one of the world’s biggest holders of the cryptocurrency — it has 193,000 Bitcoin, worth just under $13 billion.

The sale will see it offer senior unsecured debt obligations in MicroStrategy to qualified institutional investors. The notes will mature in 2030.

MicroStrategy’s stock shot up 25% on Monday as Bitcoin crossed $67,000 to within 3% of its November 2021 all-time high.

Senior unsecured notes are a type of loan that, in contrast to senior secured notes, do not have collateral backing.

While providing less security than senior secured notes, they are safer than most other debt instruments and offer buyers a higher rate of return.

The notes will bear interest payable semi-annually in arrears on March 15 and September 15 of each year, beginning on September 15, MicroStrategy said.

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MicroStrategy will also offer early buyers the option to purchase a further $90 million worth of notes.

Those will be made available to those investors within a 13-day window, beginning from the date of first issue.

“The offering is subject to market and other conditions, and there can be no assurance as to whether, when or on what terms the offering may be completed,” MicroStrategy said.

The announcement comes as demand for Bitcoin has skyrocketed, pushing its price past the $68,000 mark.

Several factors have driven the surge, including the success of the 10 US spot Bitcoin exchange-traded funds that began to operate in January, and the upcoming halving event sometime in late April.

Tyler Pearson is DL News’ junior markets correspondent. Sebastian Sinclair is a markets correspondent for DL News. Have a tip? Contact them at ty@dlnews.com and sebastian@dlnews.com.