MicroStrategy Closes $2 Bln 0% Convertible Notes Offering

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(RTTNews) - MicroStrategy Incorporated (MSTR), Monday announced that it has completed its $2 billion private offering of 0 percent convertible senior notes due 2030, available exclusively to qualified institutional buyers under Rule 144A of the Securities Act. The company also granted initial purchasers an option to acquire up to an additional $300 million in notes within five business days of issuance.

The notes are senior, unsecured obligations of MicroStrategy and do not bear interest or accrete in value. Maturing on March 1, 2030, they can only be converted before December 3, 2029, under specific conditions. After that date, noteholders may convert at any time until two trading days before maturity. MicroStrategy may settle conversions in cash, Class A common stock, or a combination of both. The initial conversion rate is 2.3072 shares per $1,000 principal, reflecting a conversion price of approximately $433.43 per share—a 35 percent premium over the stock's volume-weighted average price on February 19, 2025.

The company may redeem the notes, in whole or in part, for cash starting March 5, 2027, until 20 trading days before maturity, subject to conditions. Redemption is allowed only if the stock's sale price exceeds 130 percent of the conversion price for a specified period. The redemption price will equal the principal amount plus any accrued and unpaid special or additional interest.

If a "fundamental change" occurs, noteholders can require MicroStrategy to repurchase their notes for cash, except in limited cases. The repurchase price will include the principal amount plus any accrued and unpaid special or additional interest. Additionally, noteholders may request a repurchase on March 1, 2028, under the same terms.

MicroStrategy raised approximately $1.99 billion from the offering after fees and expenses. The company plans to use the proceeds for general corporate purposes, including bitcoin acquisitions and working capital.

The notes and any class A common stock issued upon conversion have not been registered under the Securities Act or other securities laws and cannot be offered or sold in the U.S. without registration or an applicable exemption. The offering was conducted solely through a private offering memorandum.

Monday, MSTR closed at $282.48, down 5.74%, and is trading at $283.18, up 0.25%, in after-hours trading on the Nasdaq Global Select Market.