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MSTR completed $3 BILLION Offering of Convertible Senior Notes at 0.0% interest to buy Bitcoin

Posted: Nov 23, 2024

  • MicroStrategy (MSTR) completed a $3 billion offering of convertible senior notes due 2029 with 0% coupon and 55% conversion premium
  • The notes are unsecured, senior obligations of MicroStrategy and can be converted into cash, shares of MicroStrategy's class A common stock, or a combination of both
  • The net proceeds from the sale of the notes were approximately $2.97 billion, to be used to acquire additional Bitcoin and for general corporate purposes
  • MicroStrategy is known as the world's first and largest Bitcoin Treasury Company, focusing on Bitcoin as its primary treasury reserve asset
  • The notes may not be offered or sold in the United States without registration or an applicable exemption
  • MicroStrategy's strategic treasury reserve of Bitcoin and commitment to technological innovation positions it as a leader in digital assets and enterprise analytics sector
  • MicroStrategy's conversion rate for the notes is initially set at 1.4872 shares of MicroStrategy's class A common stock per $1,000 principal amount of notes.


What do people on Reddit think?

🚨 Reddit sentiment: mixed/negative - While there are comments acknowledging the strategic ingenuity of MSTR's financial maneuver, there is a prevalent sentiment of skepticism and risk regarding the sustainability and logic of issuing large amounts of debt at zero interest solely for Bitcoin investment. Summarized comments: - MSTR is perceived as primarily a Bitcoin holding company rather than a conventional business - The zero-interest convertible bonds issued by MSTR are seen as a strategic financial maneuver, giving investors exposure to Bitcoin - Some users note the risk of the bonds being underwater and equate the maneuver to offering interest-free loans in exchange for potential stock appreciation - There is skepticism around the practicality and sustainability of the $3 billion 0% interest notes as a strategy - Users discuss the competitive and speculative nature of betting on the outcome between MSTR's approach and market opponents like Citron Stock tickers discussed: $MSTR



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