Michael Saylor’s Strategy Secures $2B Loan to Buy More Bitcoin

Michael Saylor’s Strategy (formerly MicroStrategy) has announced a $2 billion convertible senior notes offering to institutional investors, primarily to acquire more Bitcoin (BTC). The 0% interest notes, maturing in 2030, include an option for investors to buy an additional $300 million within five days. The deal is expected to close by Feb. 21, 2025, pending standard approvals.

The unsecured notes will not accrue interest or principal and can be converted only under specific conditions until Dec. 3, 2029. After that, holders may convert freely until maturity. The initial conversion rate is 2.3072 shares per $1,000 principal, pricing the conversion at $433.43 per share, a 35% premium over Strategy’s recent average stock price of $321.05.

Strategy can redeem the notes for cash starting March 2027, provided its stock trades 130% above the conversion price for a set period. In the event of a fundamental change, investors may require a cash repurchase. The company expects net proceeds of $1.99 billion, possibly $2.28 billion if additional notes are purchased, with a primary focus on Bitcoin acquisitions.

Currently, Strategy holds 478,740 BTC, valued at approximately $46.61 billion, with an average buy price of $65,101 per BTC, reflecting a 49.53% profit. However, concerns remain over potential risks. If Bitcoin’s price drops, Strategy may need to sell BTC to cover liabilities, especially if its stock price remains below the conversion price.

Despite skepticism, MSTR shares surged 140% as Bitcoin surpassed $100K, hitting a high of $543. While Saylor’s Bitcoin-heavy strategy appears to be paying off, investors continue watching closely for signs of volatility.