Strategy’s $2 Billion Convertible Note Offering Signals More Bitcoin Buys

Key Takeaways

• Strategy plans to raise $2 billion.
• The company intends to use the proceeds for general corporate purposes, including further Bitcoin acquisitions.
• Investors are betting on potential stock price appreciation rather than interest income.

Strategy, formerly known as MicroStrategy, is doubling down on its aggressive financial playbook, announcing a $2 billion offering of 0% convertible senior notes due 2030.

These unsecured notes, which bear no interest, provide the company with a substantial war chest without the burden of regular debt payments.

Capital Raising

In a private placement available to qualified institutional buyers, Strategy also included an option for an additional $300 million in notes for initial purchasers.

The notes will mature on March 1, 2030, unless repurchased, redeemed, or converted earlier.

For investors, the conversion terms are key. Holders may convert their notes under specific conditions, with the company settling in cash, shares of its Class A common stock, or a combination of both.

Beginning March 5, 2027, Strategy has the right to redeem the notes in cash—at face value plus accrued interest—if its stock price sustains at least 130% of the conversion price for a set period.

More Bitcoin Acquisitions on the Horizon

The move signals Strategy’s continued commitment to Bitcoin (BTC) accumulation.

The company has made clear that the proceeds will go toward general corporate purposes, which include further Bitcoin purchases.

Currently, Strategy holds approximately 478,740 BTC , valued at over $46 billion.

However, Strategy recently paused its relentless pace of Bitcoin acquisitions.

In the past week, it has not purchased additional Bitcoin or sold any Class A common stock through its market offering program.

Still, in 2024, the company amassed 258,320 BTC, with its most recent acquisition occurring between Feb. 3 and Feb. 9.

What a 0% Convertible Note Means for Strategy and Investors

By issuing 0% convertible notes, Strategy avoids the financial burden of interest payments, making this an attractive option in a high-interest-rate environment.

Instead of paying regular interest, the company defers financial obligations until maturity, giving it flexibility in cash management.

For investors, the appeal lies in the potential upside of Strategy’s stock price.

If the stock appreciates significantly, early investors could see strong returns when converting their notes into shares. However, there are trade-offs:

• Dilution Risk: If a large number of noteholders convert into stock, existing shareholders could see their ownership diluted.
• Market Risk: If Strategy’s stock underperforms, investors holding these notes will receive no interest and may struggle to recoup their initial investment.

Ultimately, this type of financing aligns with Strategy’s high-risk, high-reward approach—offering long-term flexibility but carrying inherent uncertainty.