Convertible Notes Offering
On June 13, 2024, MicroStrategy Incorporated (the “Company”) issued a press release announcing its intention to offer, subject to market conditions and other factors, $500 million aggregate principal amount of convertible senior notes due 2032 in a private offering to persons reasonably believed to be qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and to grant to the initial purchasers of the notes an option to purchase, within a 13-day period beginning on, and including, the date on which the notes are first issued, up to an additional $75 million aggregate principal amount of the notes. A copy of the press release announcing the offering is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
On June 14, 2024, the Company issued a press release announcing that it has priced a private offering of $700 million aggregate principal amount of its convertible senior notes due 2032. The notes will only be sold to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act. The Company also granted to the initial purchasers of the notes an option to purchase, within a 13-day period beginning on, and including, the date on which the notes are first issued, up to an additional $100 million aggregate principal amount of the notes. The offering is expected to close on June 17, 2024, subject to satisfaction of customary closing conditions.
The Company estimates that the net proceeds of the offering will be approximately $687.8 million (or approximately $786.0 million if the initial purchasers exercise in full their option to purchase additional notes), after deducting the initial purchasers’ discounts and commissions and estimated offering expenses payable by the Company. The Company intends to use the net proceeds from the sale of the notes to acquire additional bitcoin and for general corporate purposes.
A copy of the press release announcing the pricing of the offering is filed as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated herein by reference.
2025 Notes Redemption
On June 13, 2024, the Company announced that it delivered a notice of full redemption (the “Notice”) to the trustee of the Company’s outstanding 0.750% Convertible Senior Notes due 2025 (the “2025 Notes”). The aggregate principal amount of the 2025 Notes being redeemed is $650.0 million, which is equal to the current aggregate principal amount of 2025 Notes outstanding and held by investors. The Notice calls for the redemption of all of the outstanding 2025 Notes (the “Redemption”) on July 15, 2024 (the “Redemption Date”), at a redemption price equal to 100% of the principal amount of the 2025 Notes to be redeemed, plus accrued and unpaid interest, if any, to but excluding the Redemption Date, unless earlier converted.
As a result of the delivery of the Notice, at any time prior to 5:00 p.m., New York City time, on July 11, 2024, the 2025 Notes are convertible, at the option of the holders of the 2025 Notes, at the applicable conversion rate of 2.5126 shares of the Company’s class A common stock per $1,000 principal amount (reflecting a conversion price of $397.99 per share).
In the event that any holder delivers a conversion notice as provided in the indenture related to the 2025 Notes, the Company has elected to satisfy its conversion obligation with respect to each $1,000 principal amount of 2025 Notes by delivering solely shares of its class A common stock, together with cash in lieu of any fractional shares.
The information contained in Item 8.01 of this Current Report on Form 8-K relating to the Redemption and the Notice are for informational purposes only and do not constitute an offer to buy or a solicitation of an offer to sell any 2025 Notes and shall not constitute an offer, solicitation, or sale in any jurisdiction in which such offering, solicitation or sale would be unlawful.
