MicroStrategy Secures $2B Loan for Bitcoin Buy
1min read Michael Saylor, the CEO of MicroStrategy, has revealed details of a $2 billion loan that the company has secured to purchase more Bitcoin (BTC). The loan, which is in the form of 0% convertible senior notes due in 2030, is being offered exclusively to institutional investors through a private placement. The transaction is expected to close by February 21, 2025, subject to standard closing conditions.
The notes are unsecured, carry no interest, and do not accrue principal. They mature on March 1, 2030, unless converted, redeemed, or repurchased earlier. Until December 3, 2029, conversion rights are limited to certain conditions. After this date, holders may convert at will until two days before maturity. The initial conversion rate stands at 2.3072 shares per $1,000 principal, setting the conversion price at $433.43 - 35% above the weighted average stock price of $321.05 on February 19, 2025.
MicroStrategy has the option to redeem the notes for cash beginning March 5, 2027, provided its stock price exceeds 130% of the conversion price for a specified period. Should a "fundamental change" occur, noteholders may require the company to repurchase their notes for cash. The expected net proceeds amount to approximately $1.99 billion, potentially reaching $2.28 billion if additional notes are purchased. The primary use of these funds remains consistent - general corporate purposes, with a significant focus on Bitcoin acquisitions.
Currently, MicroStrategy holds 478,740 BTC, valued at around $46.61 billion, with an average purchase price of $65,101 per BTC, reflecting a 49.53% profit. Market observers remain divided on the company's strategy. Some speculate that it will only work if the price of BTC continues to rise. If Bitcoin goes into a bear market, the company could face significant challenges.
If MicroStrategy's stock price falls below the conversion price, which is set at $433.43 in the most recent prospectus, and remains below the conversion price until the notes mature, the company may have to sell some of 
