JWCA advises MicroStrategy on its $604 million upsized convertible issuance (MicroStrategy’s second issuance in 2 weeks)

March 2024 | read press release

Transaction Background

Following its successful convertible issuance in the week prior (March 5, 2024), MicroStrategy decided to tap the convertible market to raise an additional $604 million at highly attractive terms (0.875% coupon and 40.0% conversion premium) 

MicroStrategy continued to take advantage of strong underlying convertible market conditions and recent momentum in its stock to successfully execute the issuance to purchase additional bitcoin (stock up 68% since issuance in prior week)

JWCA provided extensive analysis for MicroStrategy on deal structuring and related items, such as:

• Convertible structuring

• Accounting and tax analysis

• Convertible documentation advice to ensure maximum value and future efficiency/flexibility for the company

• Syndicate structure and precedent data

• Advice on pricing on the day of execution

• Analysis of pricing mechanisms (VWAP vs. Close)

JWCA provided advice, support and analysis throughout the negotiation and execution process

Results

MicroStrategy’s fourth convertible financing was well–received by investors:

• MicroStrategy achieved a record pace for repeat convertible issuance, raising over $1.4 billion over 2 issuances in 9 days

• MicroStrategy was able to upsize the transaction due to existing investors participating again and the company’s ability to attract new investors to the transaction

• Use of volume-weighting mechanism for reference price resulted in MicroStrategy’s stock trading down only ~5% compared to comparable transactions trading down 10%+

• JWCA supported the management team on the entire day of the offering providing execution advice and ensuring a high-quality execution