How much capital is being raised and how was the offering size changed?

The company priced $700 million aggregate principal amount of convertible senior notes due 2030, up from the $600 million announced on March 4, 2024. Initial purchasers also have an option to buy up to an additional $100 million within 13 days of the notes' first issuance.

At what price would the notes convert into common stock?

The initial conversion rate is 0.6677 shares of Class A common stock per $1,000 principal amount, equivalent to an initial conversion price of approximately $1,497.68 per share. This is a premium of approximately 42.5% over the $1,051.01 last reported sale price on March 5, 2024. Conversion may be settled in cash, shares, or a combination at the company's election.

What will the company do with the proceeds?

The company intends to use the net proceeds, estimated at approximately $684.3 million (or approximately $782.0 million if the option is fully exercised), to acquire additional bitcoin and for general corporate purposes.

When can holders or the company require early repayment?

Holders may require repurchase on September 15, 2028, or upon certain fundamental change events, at 100% of principal plus accrued interest. The company may redeem for cash all or part of the notes on or after March 22, 2027, subject to conditions, including that the stock price has been at least 130% of the conversion price for a specified period.

Strategy 8-K SEC Disclosure

01—Abstract

Summary

Summary of the 8-K filed March 6, 2024. Cited figures are marked; the original filing is the authoritative source.

On March 4, 2024, MicroStrategy Incorporated (Nasdaq: MSTR) announced its intention to offer $600 million^a of convertible senior notes due 2030 in a private offering to qualified institutional buyers under Rule 144A, with an option for initial purchasers to buy up to an additional $90 million.

On March 6, 2024, the company announced it had priced the offering at an upsized $700 million^b aggregate principal amount of 0.625% convertible senior notes due 2030, with an option for up to an additional $100 million. The offering is expected to close on March 8, 2024, subject to customary closing conditions. The notes are unsecured, senior obligations that pay interest semi-annually on March 15 and September 15, beginning September 15, 2024, and mature on March 15, 2030, unless earlier repurchased, redeemed or converted.

The company may redeem the notes for cash on or after March 22, 2027, subject to conditions, and holders may require repurchase on September 15, 2028. The notes are convertible into cash, class A common stock, or a combination of both at the company's election. The initial conversion rate is 0.6677 shares per $1,000^c principal amount, equivalent to a conversion price of approximately $1,497.68 per share, a premium of approximately 42.5% over the $1,051.01 closing price on March 5, 2024.

The company estimates net proceeds of approximately $684.3 million^d, or approximately $782.0 million if the initial purchasers exercise their option in full, after discounts, commissions and offering expenses. MicroStrategy intends to use the proceeds to acquire additional bitcoin and for general corporate purposes.

02—Key points

Key Highlights

Offering upsized from $600 million (announced March 4, 2024) to $700 million aggregate principal amount of 0.625% convertible senior notes due March 15, 2030, with an option for up to $100 million more.
Estimated net proceeds of approximately $684.3 million, or approximately $782.0 million if the option is exercised in full.
Proceeds are intended to acquire additional bitcoin and for general corporate purposes.
Initial conversion price of approximately $1,497.68 per share (0.6677 shares per $1,000 principal), a premium of approximately 42.5% over the $1,051.01 closing price on March 5, 2024.
Notes may be settled in cash, Class A common stock, or a combination, at the company's election.
Company may redeem for cash on or after March 22, 2027, subject to conditions; holders may require repurchase on September 15, 2028.
Offering is being made only to qualified institutional buyers under Rule 144A and is expected to close on March 8, 2024.

03—Questions

Frequently Asked Questions

How much capital is being raised and how was the offering size changed?
The company priced $700 million aggregate principal amount of convertible senior notes due 2030, up from the $600 million announced on March 4, 2024. Initial purchasers also have an option to buy up to an additional $100 million within 13 days of the notes' first issuance.
What are the key terms of the notes?
The notes are unsecured senior obligations bearing 0.625% annual interest, paid semi-annually on March 15 and September 15, beginning September 15, 2024. They mature on March 15, 2030, unless earlier repurchased, redeemed or converted.
At what price would the notes convert into common stock?
The initial conversion rate is 0.6677 shares of Class A common stock per $1,000 principal amount, equivalent to an initial conversion price of approximately $1,497.68 per share. This is a premium of approximately 42.5% over the $1,051.01 last reported sale price on March 5, 2024. Conversion may be settled in cash, shares, or a combination at the company's election.
What will the company do with the proceeds?
The company intends to use the net proceeds, estimated at approximately $684.3 million (or approximately $782.0 million if the option is fully exercised), to acquire additional bitcoin and for general corporate purposes.
When can holders or the company require early repayment?
Holders may require repurchase on September 15, 2028, or upon certain fundamental change events, at 100% of principal plus accrued interest. The company may redeem for cash all or part of the notes on or after March 22, 2027, subject to conditions, including that the stock price has been at least 130% of the conversion price for a specified period.

04—Continue

← View all 8-K filings