TLDR:
- Strategy (formerly MicroStrategy) announces $2 billion convertible senior notes offering due 2030, with potential $300 million additional notes
- Notes will be zero-interest, unsecured obligations with conversion rights to cash or company stock
- Proceeds intended for Bitcoin purchases and general corporate purposes
- Offering limited to qualified institutional buyers under Rule 144A
- Announcement follows recent pause in company’s Bitcoin acquisition activities
Strategy, (formerly known as MicroStrategy), has announced plans to raise $2 billion through a private offering of convertible senior notes.
The company revealed on February 18, 2025, that the zero-interest notes will mature in 2030 and are being offered to qualified institutional buyers under Rule 144A of the Securities Act.
The company has included an option for initial purchasers to buy up to an additional $300 million in notes within five business days of the first issuance. This offering represents one of the largest capital raises by a corporate entity specifically targeting Bitcoin acquisition.
The notes will function as senior, unsecured obligations of Strategy without regular interest payments. Holders will have conversion rights under certain circumstances, allowing them to convert their notes into cash, shares of Strategy’s class A common stock, or a combination of both, at the company’s discretion.
Starting March 5, 2027, Strategy will have the option to redeem the notes for cash, either in whole or in part. This redemption option is subject to specific conditions, including that the company’s stock price exceeds 130% of the conversion price for a designated period.
The conversion rate and other specific terms will be determined when the offering is priced. Strategy plans to use the U.S. composite volume weighted average price of its class A common stock from 1:30 p.m. through 4:00 p.m. Eastern Standard Time on the pricing date as the reference price for calculating the initial conversion price.
Noteholders will have protection against fundamental corporate changes. If such events occur, they can require Strategy to repurchase their notes for cash at the principal amount plus any accrued special interest. Additionally, unless certain conditions are met, noteholders can require the company to repurchase their notes on March 1, 2028.
The company has stated that the proceeds will be used for general corporate purposes, with a specific focus on Bitcoin acquisition and working capital needs. This announcement follows a recent pause in Strategy’s Bitcoin purchasing activities, marking only the second such pause in 14 weeks.
Strategy’s offering is exclusively available to qualified institutional buyers under Rule 144A of the Securities Act. The notes and any shares of Strategy’s class A common stock that might be issued upon conversion have not been registered under the Securities Act or any state securities laws.
Webinar Due Tomorrow
To support the offering, Strategy has scheduled a live Video Webinar for February 19, 2025, starting at approximately 10:00 a.m. Eastern Standard Time. Qualified institutional buyers interested in participating must complete an investor survey through the company’s website.
The completion of the offering remains subject to market conditions and other factors, with no guarantee that it will be completed as described or at all. Strategy has emphasized that this announcement does not constitute an offer to sell or a solicitation of an offer to buy the notes.
Currently, Strategy holds over 2% of the total Bitcoin supply, making it the world’s largest corporate holder of the cryptocurrency. The company rebranded from MicroStrategy to Strategy as part of its evolving focus on Bitcoin treasury operations.
The offering represents a continuation of Strategy’s established pattern of using debt and equity financing to accumulate Bitcoin. The company combines this treasury strategy with its enterprise analytics software business, which focuses on AI-powered solutions.
Strategy maintains its position as both a technology company and a Bitcoin treasury company, offering investors various ways to gain economic exposure to Bitcoin through both equity and fixed-income instruments.
The notes will be offered through a private offering memorandum, with specific details about terms and conditions provided to qualified institutional buyers who express interest in participating in the offering.
Final regulatory approvals and market conditions will determine the ultimate success and timing of the offering, with the company maintaining flexibility to adjust terms based on market response and investor interest.
