"Wow that's great, MicroStrategy must be very optimistic about the future of BTC."
MicroStrategy announced its intention to offer $500 million in convertible senior notes* due 2032, in which the private offering to qualified institutional buyers will comply with Rule 144A of the Securities Act of 1933.
*Debt securities contain an option that makes the notes convertible to a fixed amount for the issuer's shares
The net proceeds are used to acquire additional BTC including other corporate purposes as part of MicroStrategy's long-term goal of using BTC as its treasury reserve asset.
MicroStrategy also expects to grant initial purchasers of the notes the options to purchase an additional $75 million in aggregate principal amount of the notes while the interest rate, initial conversion rate and other terms of the notes will be determined at the time of the offering price.
According to the press release, the notes will be offered and sold to qualified buyers under Regulation 144A of the Securities Act 1933.
This means that the convertible senior notes are convertible and any shares are convertible into MicroStrategy class common stock that will not be officially registered under the Securities and Exchange Commission (SEC).
On the other hand, the Chief Executive Officer (CEO) of MicroStrategy Michael Saylor said that he has absolutely no plans to sell any of his holdings in the digital asset BTC in the near future.
This is because spot ETFs have attracted a lot of inflows by institutions into the BTC ecosystem, commented Saylor, adding that ETFs have facilitated digital transformation, causing hundreds of millions of dollars to flow daily from the traditional ecosystem to the digital economy.