Breaking News: MicroStrategy issues bond with an annual interest rate of 0.75% for buyers

MicroStrategy CEO Michael Saylor announced at 8:30 pm that a total of $550 million worth of Convertible Senior Notes will be issued, with a maturity date in 2025 and an annual interest rate of 0.75%. The notes will be issued in two tranches on June 15 and December 15 each year. However, starting on December 20, 2023, MicroStrategy will have the option to redeem the notes at face value plus accrued interest, subject to certain conditions.

MicroStrategy CEO Michael Saylor announced at 8:30 pm that the company will issue a total of $550 million worth of Convertible Senior Notes, which will mature in 2025 with an annual interest rate of 0.75%. The notes will be paid semi-annually on June 15 and December 15 each year. Starting on December 20, 2023, MicroStrategy will have the option to redeem the notes at face value plus accrued interest, subject to certain conditions.

These notes can be converted into cash or MicroStrategy's stock, with a conversion price of 2.5126 shares per $1,000 principal amount. Currently, this represents a 37.5% premium over MicroStrategy's stock price of $289.45 on December 8, which is $397.99 per share.

According to the company, after the issuance of the notes, MicroStrategy plans to invest all the proceeds from the sale of the notes into Bitcoin, unless needed for operational working capital, in accordance with the company's cash reserve policy.

Some netizens have mocked the company for investing the note proceeds in Bitcoin at such a low annual rate, calling it unreasonable.

It is speculated that this move may be more attractive to those who are leveraging for gains and expecting an increase in the company's stock price.