MicroStrategy Sells $2.6 Billion of Zero-Coupon Convertible Bonds -- WSJ

Dow Jones11-20 22:45

By Vicky Ge Huang

MicroStrategy has sold a larger-than-expected $2.6 billion of bonds that convert into stock, giving the cryptocurrency-buying software company more cash to purchase bitcoins.

The convertible bond offering was increased in size by almost 50%, from a previous $1.75 billion, the company said Wednesday, signaling strong investor demand.

The company unveiled an audacious plan last month to raise $42 billion of capital-half in stock and half through bonds-over three years to buy bitcoin. It recently bought $4.6 billion of bitcoin under the new fundraising program, bringing its total holding of the token to 331,200 bitcoins, valued at nearly $31 billion.

Shares of MicroStrategy jumped about 10% in morning trading Wednesday. The stock has skyrocketed more than sixfold this year.

The bonds mature in December 2029 and pay no interest. They will be unsecured, senior obligations, meaning they aren't backed by collateral but rank above junior debts and equity in the queue for repayment.

The initial conversion price for the notes was set at $672.40 a share, a roughly 55% premium to where MicroStrategy stock was trading on Tuesday afternoon.

This item is part of a Wall Street Journal live coverage event. The full stream can be found by searching P/WSJL (WSJ Live Coverage).

(END) Dow Jones Newswires

November 20, 2024 09:45 ET (14:45 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.

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