MicroStrategy Issues $2B in Convertible Notes to Expand Bitcoin Holdings
Key Highlights:
- MicroStrategy (now Strategy) is offering $2 billion in convertible senior notes due 2030 to finance further Bitcoin acquisitions.
- The company currently holds 478,740 BTC, valued at over $46 billion.
- Investors can convert the notes into cash, Strategy’s Class A stock, or both.
- The firm remains committed to raising $42 billion by 2027 to expand its Bitcoin reserves.
MicroStrategy’s Bold Move to Increase Bitcoin Reserves
Strategy, formerly known as MicroStrategy, has announced a $2 billion convertible senior notes offering, aimed at purchasing more Bitcoin and supporting corporate operations. These unsecured notes, maturing in 2030, will be available to qualified institutional investors under Rule 144A of the Securities Act.
The offering also grants an option for investors to purchase an additional $300 million in notes within five business days. These bonds will carry zero interest, making them an attractive option for investors betting on Strategy’s Bitcoin-centric approach.
Starting March 5, 2027, Strategy can redeem the notes for cash if its stock price exceeds 130% of the conversion price for a specific period. Additionally, noteholders have the option to demand repurchase on March 1, 2028, or in the case of a major corporate change.
Aggressive Bitcoin Accumulation Despite Market Volatility
This is one of Strategy’s largest capital raises for Bitcoin purchases. As of February 17, the company owns 478,740 BTC, reinforcing its commitment to Bitcoin as a primary treasury reserve asset.
Despite its aggressive Bitcoin strategy, the firm has faced financial challenges, including a $1.79 billion impairment loss on its Bitcoin holdings. Its stock has experienced high volatility, currently 30% below its November peak, but remains up over 700% in the last three years.
Hedge funds have actively traded Strategy’s convertible debt, employing bond purchasing and stock short-selling strategies. The company continues using stock sales and fixed-income securities to fund Bitcoin acquisitions, maintaining its goal of raising $42 billion by 2027.
Under Executive Chairman Michael Saylor, Bitcoin remains the company’s core asset, with plans for continued accumulation despite market fluctuations.
