Strategy Buys Back $1.5B in Convertible Notes at Discount Amid Bitcoin Drop

Strategy (NASDAQ: MSTR), the largest corporate holder of bitcoin, announced plans to repurchase approximately $1.5 billion of its outstanding 0% Convertible Senior Notes due 2029 through privately negotiated deals with select investors. The move was disclosed in a regulatory filing released Friday and highlights the company’s ongoing efforts to manage its debt structure while navigating volatile cryptocurrency markets.

The company expects to spend around $1.38 billion in cash to complete the transaction, allowing it to buy back the notes below their original value. The discounted repurchase could help Strategy reduce future liabilities while strengthening its balance sheet.

The convertible notes were initially issued in November 2024 with a total notional value of $3 billion and carry a 0% interest rate. The debt is scheduled to mature on Dec. 2, 2029, and includes a conversion price of $672.40 per share. However, with MSTR stock currently trading near $183, the conversion option remains far out of the money.

Strategy noted that the final purchase price may still change depending on the volume-weighted average price of its Class A common stock during a specified calculation period. The company said the transaction will likely close around May 19, after which the repurchased notes will be cancelled. Roughly $1.5 billion of the 2029 convertible notes will remain outstanding following settlement.

To finance the deal, Strategy plans to use available cash reserves, proceeds from equity sales, and potentially sales of bitcoin holdings. The announcement comes as both MSTR stock and bitcoin prices face renewed pressure. Shares of Strategy fell 2% in pre-market trading, while bitcoin slipped overnight to around $80,400.

The latest move reflects Strategy’s continued focus on capital management as it maintains one of the largest bitcoin treasury positions among publicly traded companies.