Michael Saylor's Strategy Adjusts Convertible Debt Terms
Strategy is offering attractive terms to investors for its upcoming $2 billion convertible debt issuance, sources report.
Reduced Conversion Premium
The Bitcoin treasury company is marketing a 35% conversion premium on zero-coupon convertible notes due 2030. This is lower than the previously offered range of 40%-50%. A conversion premium represents the required percentage increase in underlying stock price for convertible security to be converted into shares.
Volatility Considerations
Strategy's convertible offering comes amidst reduced volatility in its share price. The 30-day volatility of Strategy shares has significantly decreased, affecting the hedging strategies of funds that speculate on the company's volatility.
Capital Raising Strategy
This is Strategy's first convertible offering since raising over $560 million in preferred stock. The company aims to raise $42 billion in capital by 2027 through stock sales and fixed-income securities to fund Bitcoin purchases.
Bitcoin Holdings and Stock Performance
As of February 17, Strategy held 478,740 Bitcoin, representing over 2.5% of the cryptocurrency's total supply. Despite a 30% decline from its November record, the stock has gained over 700% in the last three years.