01—Abstract
Summary
Summary of the 8-K filed March 11, 2024. Cited figures are marked; the original filing is the authoritative source.
MicroStrategy Incorporated (now Strategy Inc) filed this Form 8-K under Item 8.01 (Other Events) to update investors on its recent convertible notes offering and bitcoin purchases.
As previously disclosed, on March 8, 2024, the company completed a private offering of convertible senior notes carrying a 0.625% coupon and an approximately 42.5% conversion premium over the last reported sale price of its class A common stock on March 5, 2024. The offering was upsized to $800 milliona in aggregate principal amount, including the exercise of the initial purchasers' option to buy an additional $100 million of notes. Net proceeds to MicroStrategy totaled approximately $782.0 million.
The company announced that between February 26, 2024 and March 10, 2024, it acquired approximately 12,000 bitcoins for approximately $821.7 millionb in cash, at an average price of approximately $68,477 per bitcoin, inclusive of fees and expenses. The purchase was funded with $781.1 million of proceeds from the offering and $40.6 million of Excess Cash, a term defined in the company's Form 10-K for the fiscal year ended December 31, 2023. As of March 10, 2024, MicroStrategy and its subsidiaries held an aggregate of approximately 205,000 bitcoins, acquired at an aggregate purchase price of approximately $6.91 billion and an average purchase price of approximately $33,706 per bitcoin, inclusive of fees and expenses.
02—Key points
Key Highlights
- Convertible notes offering completed March 8, 2024: upsized to $800 million aggregate principal, with a 0.625% coupon and an approximately 42.5% conversion premium
- Net proceeds of approximately $782.0 million from the offering
- Acquired approximately 12,000 bitcoins between February 26 and March 10, 2024 for approximately $821.7 million in cash, at an average price of about $68,477 per bitcoin
- Bitcoin purchase funded by $781.1 million of offering proceeds and $40.6 million of Excess Cash
- Aggregate holdings as of March 10, 2024: approximately 205,000 bitcoins
- Total cost of holdings: approximately $6.91 billion, an average purchase price of approximately $33,706 per bitcoin, inclusive of fees and expenses
03—Questions
Frequently Asked Questions
What were the terms of the convertible notes offering?
The offering was a private placement of convertible senior notes with a 0.625% coupon and a conversion premium of approximately 42.5% over the last reported sale price of the class A common stock on March 5, 2024. It was upsized to $800 million in aggregate principal amount, including $100 million from the exercise of the initial purchasers' option.
How much did MicroStrategy spend on bitcoin in this period?
Between February 26, 2024 and March 10, 2024, the company acquired approximately 12,000 bitcoins for approximately $821.7 million in cash, funded by $781.1 million of offering proceeds and $40.6 million of Excess Cash.
What is the company's total bitcoin position?
As of March 10, 2024, MicroStrategy and its subsidiaries held approximately 205,000 bitcoins, acquired at an aggregate purchase price of approximately $6.91 billion and an average purchase price of approximately $33,706 per bitcoin, inclusive of fees and expenses.
What is Excess Cash?
The filing states that Excess Cash is defined in the company's annual report on Form 10-K for the fiscal year ended December 31, 2023. The company used $40.6 million of Excess Cash toward the bitcoin purchases.
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