MicroStrategy (MSTR) has completed the issuance of $3 billion in convertible senior notes due December 2029 with a 0% interest rate, intending to use some or all of the proceeds to purchase additional Bitcoin.
The business analytics company announced the completion as the company's stock rose more than 25% on November 21, data from Google Finance shows.
The convertible senior notes have a 55% conversion premium with an implied conversion price of around $672 — the predetermined price at which the holder can choose to buy or sell MicroStrategy's Class A shares.
Source: Michael Saylor
The lack of periodic interest payments for the holders of these convertible senior notes means it will not pay regular interest rates. These convertible notes are sold at a discount and will mature at par value if not converted before maturity.
They also have higher priority than common stock in the event of bankruptcy or liquidation.
MicroStrategy could purchase around 30,600 Bitcoin (BTC) if it dedicates the entire $3 billion to buying Bitcoin.
The $3 billion issuance follows MicroStrategy's announcement on November 18 about raising $1.75 billion at a 0% interest rate, which was later increased to $2.6 billion on November 20.
These issuances are part of MicroStrategy's bold plan to raise $42 billion over the next three years to accumulate more Bitcoin under its "21/21" plan — comprising $21 billion in equity capital and $21 billion in fixed-income.
Currently, MicroStrategy holds 331,200 Bitcoin worth over $32.7 billion — the most among public companies — according to Saylor Tracker.
The change in MSTR stock price on November 21, including a 5.3% recovery in after-hours trading. Source: Google Finance
The drop occurred as Citron Research revealed that they have taken a short position on MSTR, arguing that MSTR stock has become "too hot" and its volume has "completely detached from the Bitcoin fundamentals."
MSTR is still one of the best-performing stocks in the U.S. market in 2024, up 480% since the beginning of the year.
On November 20, it was the 2nd most traded stock in the U.S. as many investors weigh the upside case and risks of exposure to Bitcoin through MSTR.
Michael Saylor's company has contributed to a record $70 billion trading volume on November 21 from the "Bitcoin Industrial Complex" — including the U.S. Bitcoin spot ETF and Bitcoin-related stocks like MSTR and Coinbase (COIN).
Currently, Bitcoin is priced at $98,423 — about 1.5% shy of the $100K mark, data from CoinGecko shows.
