MicroStrategy Closes $3B Convertible Bond Deal to Fuel Bitcoin Accumulation Strategy

MicroStrategy has successfully completed a $3 billion convertible bonds offering, marking another significant move in its aggressive Bitcoin accumulation strategy. The convertible senior notes due 2029 were issued at 0% interest, with the company receiving approximately $2.97 billion in net proceeds after underwriting costs.

The Bond Structure: Key Terms at a Glance

The convertible bonds carry an initial conversion rate of 1.4872 MSTR shares per $1,000 principal amount, translating to a conversion price of approximately $672.40 per share. This represents a 55% premium over MicroStrategy’s volume-weighted average stock price recorded on November 19, 2024, which stood at $433.80.

Unlike traditional bonds, these notes bear zero coupon interest, meaning investors won’t receive periodic interest payments. The principal amount also remains static without accretion. The securities will mature on December 1, 2029, unless holders exercise conversion, redemption, or repurchase rights earlier.

Redemption and Conversion Options

Starting December 4, 2026, MicroStrategy retains the right to redeem all or part of the notes at face value plus any accrued special interest, provided the stock price maintains at least 130% of the conversion price for a specified period.

Bondholders gain the ability to force repurchase on June 1, 2028, or upon fundamental changes to the company. Additionally, if MicroStrategy triggers certain corporate events or initiates redemption, the conversion rate may increase for note holders who choose to convert during these periods.

The convertible securities can be settled in cash, MSTR shares, or a combination thereof—giving MicroStrategy flexibility in managing its balance sheet and stock dilution.

Deployment Strategy: Bitcoin Remains the Priority

MicroStrategy plans to deploy the $2.97 billion net proceeds primarily toward acquiring additional Bitcoin, alongside general corporate operations. This aligns with the company’s core positioning as “the world’s first and largest Bitcoin Treasury Company,” a distinction underscoring its commitment to treating Bitcoin as a strategic reserve asset rather than a speculative holding.

The offering was structured as a private placement, available only to qualified institutional buyers under SEC Rule 144A. The securities remain unregistered and cannot be publicly traded without proper exemptions.

Broader Implications for Digital Asset Strategy

This convertible bond issuance demonstrates institutional appetite for debt instruments tied to Bitcoin-focused companies. By offering zero-coupon convertible securities, MicroStrategy reduces immediate cash drain while preserving optionality for both the company and investors—those bullish on MSTR can exercise conversion rights, while yield-focused investors benefit from potential appreciation.

The 55% conversion premium reflects current market sentiment toward MicroStrategy’s Bitcoin treasury strategy, signaling investor confidence in both the asset class and the company’s execution capabilities. As MicroStrategy continues deploying capital into Bitcoin via equity and debt raises, its treasury reserve strategy increasingly influences how traditional capital markets engage with digital assets.