Strategy intends to buy back $1.5 billion in 2029 convertible notes, funded by cash reserves or bitcoin liquidations.

Strategy, led by Michael Saylor, is taking steps to reduce its convertible debt exposure as part of a broader effort to optimize its bitcoin-backed balance sheet.

Disclosure: The author holds shares in Strategy (MSTR).

The company said Friday it has reached agreements to repurchase roughly $1.5 billion of its outstanding 0% Convertible Senior Notes due 2029 through privately negotiated transactions with certain investors.

Strategy expects to spend approximately $1.38 billion in cash on the buyback, implying the notes are being retired at a discount to face value.

Originally 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—well above the current share price of $183.

The final repurchase price remains subject to adjustment and will depend in part on the volume-weighted average price of Strategy’s Class A stock over a specified period.

To finance the transaction, the company plans to draw on existing cash, proceeds from equity issuance, and potentially sales of bitcoin. Settlement is expected around May 19, after which the repurchased notes will be cancelled, cutting the outstanding balance of the 2029 converts to about $1.5 billion.

Shares of Strategy (MSTR) declined 2% in pre-market trading, tracking weakness in bitcoin, which slipped to around $80,400 overnight.

About The Author

ctleditor

See author's posts