MSTR.PNG

JWCA advises MicroStrategy on its record-breaking $3.0 billion zero-coupon convertible issuance (MicroStrategy’s fifth convertible issuance in 2024)

november 2024 | read press release

Transaction Background

Following four successful convertible issuances in March, June, and September 2024 raising over $3bn, MicroStrategy (the “Company”) tapped the convertible market for the fifth time in November 2024 to raise an additional $3.0bn at highly attractive terms (0.00% coupon and 55.0% conversion premium)

MicroStrategy was able to take advantage of the current strong crypto markets, its recent strong share price performance and attractive underlying convertible market conditions to successfully execute the new issuance

MicroStrategy plans to use the proceeds to purchase bitcoin and for general corporate purposes

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

  • Convertible structuring and documentation

  • Syndicate structure and precedent data

  • Investor targeting

  • Advice on pricing on the day of execution

  • Analysis and design of pricing mechanism (full-day VWAP, partial-day VWAP, closing price)

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

Results

MicroStrategy’s seventh convertible financing, and fifth of 2024, was well–received by investors:

  • MicroStrategy continued its record pace for repeat convertible issuance, raising over $6bn in 5 issuances in 2024

  • The pricing terms of 0.00% coupon and 55.0% conversion premium represented the best pricing outcome in the convertible market since 2020 and is the largest 0.00% coupon US marketed convertible over the last decade

  • The equity market reacted very positively about the transaction with the Company’s share price increasing 12% on the day (effective conversion premium of ~75%)

  • MicroStrategy’s offering attracted significant demand enabling the Company to upsize the transaction by nearly 50%

  • This is the seventh convertible financing where J. Wood Capital has acted as financial advisor to MicroStrategy raising nearly $8bn in support of the Company’s bitcoin acquisition and Treasury management strategy

  • JWCA supported the management team by providing execution advice and ensuring a high-quality execution