MicroStrategy, a business specializing in Bitcoin development and enterprise analytics software, plans to raise $700 million by selling “convertible senior notes.”
The notes offer a modest yearly interest rate of 0.625% until they reach their maturity date in 2030, allowing investors to receive regular interest payments.
MicroStrategy has the ability to repurchase the notes for cash at a later date, subject to specific criteria, such as a substantial rise in the stock price.
Investors have the option to request the repurchase of the notes at their initial price, along with any outstanding interest, either in 2028 or in the event of significant corporate changes.
The sale is specifically aimed at large institutional investors and will not be made available to the general public due to regulatory constraints.
MicroStrategy is obtaining loans from acquaintances through the issuance of IOUs, known as convertible notes. These notes accrue a modest interest rate and can be exchanged for potentially more valuable firm shares, subject to specific criteria.
The borrowed funds will be utilized to make more investments in Bitcoin and to meet other financial obligations, with the objective of generating benefits for both the company and its lenders.
Lately, the firm spent $37.2 million to buy an extra 850 BTC at an average cost of $43,764—a little bit more than the $43,200 current market value, under the direction of Executive Chairman Michael Saylor.