Strategy Unveils $2B Convertible Note Offering to Expand Bitcoin Holdings

Strategy (Nasdaq: MSTR) announced its plans to offer, subject to market conditions and other factors, $2 billion in 0% convertible senior notes due 2030, on Tuesday. The private offering will be available to institutional buyers who qualify under Rule 144A of the Securities Act of 1933, as amended.

Hours after issuing a profitability warning, Strategy (formerly known as MicroStrategy) revealed its intention to use the proceeds from this offering for general corporate purposes, including acquiring more bitcoin.

The notes, set to mature on March 1, 2030, can be repurchased, redeemed, or converted earlier. Upon conversion, Strategy will settle payments in cash, class A common stock, or a combination of both. Additionally, the Strategy plans to grant initial purchasers an option to buy up to $300 million in additional notes within five business days of issuance.

Earlier the same day, the bitcoin treasury firm cautioned investors about profitability concerns in a 10-K filing with the U.S. Securities and Exchange Commission, citing a potentially increased tax burden.

"Reflecting on generating a net loss for the fiscal year ended Dec. 31, 2024, primarily due to $1.79 billion of digital asset impairment losses, Strategy warned it 'may not be able to regain profitability in future periods,' particularly if it incurs significant fair value losses related to its bitcoin holdings," The Block's James Hunt reported. "A significant decrease in the market value of its bitcoin could adversely affect the firm’s ability to satisfy its financial obligations."

In 2024, Strategy acquired approximately 258,320 Bitcoin. Following its most recent purchase between Feb. 3-9, the company’s total bitcoin holdings now stand at 478,740 BTC, valued at over $46 billion.