(Bloomberg) — Michael Saylor’s Strategy plans to offer $2 billion of convertible debt in a private offering, extending the self-styled Bitcoin treasury company’s unconventional fundraising strategy.
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The firm, which until recently was called MicroStrategy Inc., intends to sell the senior notes due 2030 with a 0% coupon, according to a statement on Tuesday. The offering’s proceeds will be used for purposes including acquiring more Bitcoin.
The move comes after a week where the company did not raise cash through sales of shares or debt to buy Bitcoin, which Strategy had done regularly in the recent past. The company had announced purchases of the cryptocurrency in 12 of the last 14 weeks.
The notes are being offered with a 40% to 50% conversion premium, and include a three-year put option, according to people familiar with the matter. A put gives holders of the notes the option to redeem the bond before it matures.
A representative for Strategy didn’t immediately respond to a request for comment.
The issue also comes after Strategy reduced its workforce by about 20%, or 400 positions, to 1,534 employees last year, according to its annual report published Tuesday.
Strategy’s stock has shed about 30% of its value from a November record, though it remains up more than 700% over the past three years.
The company held 478,740 Bitcoin as of Feb. 17, or more than 2.5% of all the tokens that will ever exist, worth more than $45 billion.
It is Strategy’s first straightforward convertible offering since the company raised more than $560 million at a steep discount. The company aims to raise $42 billion of capital through 2027 to fund Bitcoin purchases using at-the-market stock sales and fixed-income securities.
Hedge funds have been driving some of the demand for the convertible debt that’s been doled out in public offerings, as they seek out Strategy for trades that incorporate buying the bonds and selling the shares short, essentially betting on the underlying stock’s volatility.
Strategy expects to offer initial buyers the option to purchase as much as an additional $300 million of the notes. It will host a live webinar at 10 a.m. New York time on Wednesday, the statement showed.
(Updates with details of offering in fourth paragraph and employee count in sixth paragraph.)
