MicroStrategy Raises $3B in Debt to Boost Bitcoin Holdings; Shares Fall 16%

With the completion of a $3 billion convertible note issuance, Microstrategy has strengthened its position as the largest bitcoin (BTC) holder, holding 331,200 BTC, which is currently worth $32.519 billion.

MicroStrategy Completes $3 Billion Convertible Notes Sale

According to a company announcement on Nov. 21, 2024, Microstrategy Incorporated (Nasdaq: MSTR), which is well-known for its substantial bitcoin (BTC) investments, has finished a $3 billion issue of convertible senior notes that are due in 2029. The Virginia-based company intends to use the money for basic business needs as well as to buy more bitcoin.

An option for the original buyers to buy an additional $400 million was part of the debt sale, and it was fully exercised. According to the press release, these notes are convertible into cash, Microstrategy stock, or a combination of the two. They are offered for sale privately to eligible institutional buyers and do not carry regular interest. The conversion rate, which represents a 55% premium over the company's most recent stock price, is set at 1.4872 shares per $1,000 principal.

Microstrategy's continuous plan to expand its bitcoin holdings includes its most recent offering. Citing Bitcoin's potential as a store of value (SoV) and digital capital, the corporation first made it its main treasury reserve asset in 2020. As of right now, Microstrategy has 331,200 BTC in total, which is worth about $32.519 billion at current exchange rates.

The business has employed a mix of debt and stock issues in addition to operating cash flows to fund its bitcoin-focused strategy. Microstrategy has stuck to its position on bitcoin as a hedge against inflation and a pillar of its business strategy, despite the fact that its approach has generated both praise and criticism.

Microstrategy will be able to redeem the convertible notes starting in December 2026 under specific conditions, as they mature in December 2029. After subtracting fees and costs associated with the offering, the business reported net proceeds of $2.97 billion.

By combining its enterprise analytics business with an expanding portfolio of digital assets, Microstrategy has established itself as a significant player in the cryptocurrency space, as seen by its aggressive bitcoin acquisition strategy. As the trading day ended on November 21, Microstrategy's (MSTR) stock fell 16%, indicating a dramatic shift in investor opinion.