Michael Saylor’s company has successfully raised $2 billion through a convertible debt offering after making the deal more attractive to investors. The firm intends to use these funds for various purposes, including expanding its Bitcoin holdings.
The company, recently rebranded from MicroStrategy Inc., issued zero-coupon convertible senior notes set to mature in 2030, with a 35% conversion premium. This premium is based on the volume-weighted average price of $321.05 per share, observed over a period on Wednesday afternoon. Initially, the company had marketed a conversion premium in the range of 40% to 50%, but ultimately settled on a lower figure.
Following the announcement, the company’s stock saw a 1.7% increase in pre-market trading on Thursday, reaching $323.96 per share. However, this came after a 4.6% decline on Wednesday, the steepest drop in nearly a month. Despite experiencing a 30% decline from its peak in November, the stock remains significantly up, having surged over 700% in the past three years.
As of February 17, the company held 478,740 Bitcoin, representing more than 2.5% of the total supply that will ever exist. At the time, these holdings were valued at over $46 billion, underscoring the firm’s commitment to its Bitcoin investment strategy.
Stock volatility has shown signs of stabilizing in recent months. According to market data, the company’s 30-day volatility is now less than half of what it was at its peak in December. This shift in volatility could influence demand from hedge funds that typically engage in arbitrage strategies involving the company’s shares—buying the convertible bonds while short-selling the stock as a hedge against market fluctuations.
This latest fundraising effort comes on the heels of another capital-raising move last month, when the firm secured over $560 million through preferred stock issued at a significant discount. Looking ahead, the company has set an ambitious target to raise $42 billion by 2027. This capital will be raised through a combination of at-the-market stock sales and fixed-income securities, all with the goal of further expanding its Bitcoin holdings.
The newly issued convertible bonds also come with a three-year put option, allowing bondholders the opportunity to redeem their bonds before the maturity date. This feature adds flexibility for investors while reinforcing the firm’s long-term commitment to its Bitcoin-centric strategy.
By Alejandro Silva Ramírez, Crypto Analyst & Columnist