Saylor’s Strategy Raises $2 Billion in Convertible Bond Sale to Fuel Bitcoin Purchases
Strategy, the Bitcoin-focused investment firm led by Michael Saylor, has successfully raised $2 billion through a convertible debt offering, further bolstering its mission to expand its Bitcoin holdings. The proceeds from the bond sale will be used for strategic investments, including additional Bitcoin acquisitions, according to a Thursday statement.
Convertible Bond Terms and Market Response
The zero-coupon convertible senior notes, due in 2030, were priced with a 35% conversion premium, based on the $321.05 volume-weighted average share price recorded on Wednesday afternoon. While the premium fell below the 40% to 50% range initially marketed, the offering still attracted strong investor interest.
Following the announcement, Strategy's stock rose 1.7% to $323.96 in pre-market trading on Thursday, recovering slightly after a 4.6% decline the previous day—its largest single-day drop in nearly a month. Despite the recent pullback, Strategy’s stock remains up over 700% in the past three years.
Expanding Bitcoin Holdings and Future Plans
As of February 17, Strategy held 478,740 BTC, representing more than 2.5% of Bitcoin's total supply, valued at over $46 billion. The firm has been aggressively accumulating Bitcoin through equity offerings, debt sales, and preferred stock issuances.
This latest bond sale aligns with Strategy's broader plan to raise $42 billion by 2027, leveraging at-the-market stock sales and fixed-income securities to fund ongoing Bitcoin acquisitions.
Market Dynamics and Investor Outlook
Recent volatility in Strategy shares has moderated, with 30-day volatility now less than half of its December peak, according to Bloomberg calculations. This shift could influence demand from hedge funds, which often engage in convertible arbitrage trades by buying the bonds and shorting the stock to capitalize on price fluctuations.
The convertible notes also include a three-year put option, allowing investors to redeem the bonds before maturity, providing an added layer of flexibility and risk mitigation.