Strategy, under the leadership of Michael Saylor, is moving to cut its outstanding convertible debt as it reshapes liabilities linked to its bitcoin treasury strategy.
Disclosure: The author owns shares in Strategy (MSTR).
The company disclosed Friday that it has agreed to repurchase about $1.5 billion of its 0% Convertible Senior Notes due 2029 through privately negotiated transactions with select holders.
The buyback is expected to cost approximately $1.38 billion in cash, signaling that the notes are being retired below par value.
Issued in November 2024 with a total size of $3 billion, the zero-coupon notes mature on Dec. 2, 2029, and carry a conversion price of $672.40 per share—significantly higher than the current stock price of $183.
The final pricing of the repurchase remains subject to adjustment and will partly depend on the volume-weighted average price of Strategy’s Class A shares over a defined period.
Strategy plans to fund the transaction using a mix of existing cash, proceeds from stock sales, and potentially bitcoin sales. The deal is expected to settle around May 19, after which the repurchased notes will be cancelled, reducing the remaining 2029 notes outstanding to roughly $1.5 billion.
Strategy’s common stock (MSTR) slipped 2% in pre-market trading, in line with a pullback in bitcoin, which declined to around $80,400 overnight.
