Private Offering of Convertible Senior Notes
Microstrategy Solutions, the company famous for investing $475M from its treasury into Bitcoin is now looking to raise debt to buy more Bitcoin. Overall, the company is looking to raise $400M in convertible senior notes due 2025. They are also giving initial purchasers a 13-day grace period to purchase an additional $60M worth of notes. Interest shall be paid semi-annually, unless the notes are repurchased/redeemed/converted before December 15 2025.
A senior convertible note is a debt security which gives the option to the investor to convert that debt into a pre-determined amount in the company’s shares, in this case MSTR shares.
According to their announcement, the offering will be subject to “market and other conditions” with no assurance as when or on what terms the offering would be completed.
Treasury Reserve Policy
Earlier this year, Microstrategy solutions adopted Bitcoin as its primary reserve asset. The $400M in debt raised will not be subject to different conditions, in fact their announcement clearly states:
“MicroStrategy intends to invest the net proceeds from the sale of the notes in bitcoin in accordance with its Treasury Reserve Policy pending the identification of working capital needs and other general corporate purposes.“
Microstrategy Solutions was founded in 1989 by Micheal Saylor whom has now become a prominent figure in the crypto-community. The company offers business intelligence, mobile software, and cloud-based services. The company’s stock price (Ticker: MSTR) grew by over 3,700% during the Dot-Com bubble and has recently begun appreciating alongside the price of Bitcoin due to their new Treasury Reserve Policy.