Strategy Plans $2B Convertible Note Offering to Buy More Bitcoin

 

Strategy, formerly MicroStrategy, has announced a $2 billion convertible senior notes offering. The company aims to use the proceeds to acquire more BTC and support corporate operations. The notes, due in 2030, will be available to qualified institutional buyers under Rule 144A of the Securities Act.

The offering includes an option for initial buyers to purchase up to an additional $300 million in notes within five business days. These notes will carry zero interest and be unsecured obligations of Strategy. Holders can convert them into cash, Strategy’s class A common stock, or both.

Starting at the year March 5, 2027, Strategy can redeem the notes for cash if its stock price exceeds 130% of the conversion price for a set period. Additionally, noteholders can require repurchase on March 1, 2028, or in the event of a fundamental corporate change.

This marks one of the company’s largest capital raises for Bitcoin acquisitions. As of February 17, Strategy holds 478,740 BTC, valued at over $46 billion. The company has been aggressively accumulating Bitcoin as part of its long-term strategy.

The announcement follows a temporary pause in its Bitcoin purchases. Strategy had previously acquired Bitcoin in 12 of the last 14 weeks. The company also recently reported a $1.79 billion impairment loss on its Bitcoin holdings and issued a profitability warning.

Strategy’s stock has remained volatile. While it is down 25% from its November peak, it has surged over 650% in the past three years. Hedge funds have been active in trading the company’s convertible debt, using strategies involving bond purchases and stock short-selling.

The company remains committed to its plan of raising $40billion in capital by 2027. It continues to use stock sales and fixed-income securities to fund Bitcoin acquisitions. Executive Chairman Michael Saylor has positioned Bitcoin as the firm’s primary treasury reserve asset.