Starting With the $1B in Debt Financing Done Earlier in 2021 | LibreCharts

Starting With the $1B in Debt Financing Done Earlier in 2021

Back in February, MicroStrategy announced that they would be debt financing a huge purchase of Bitcoin (adjusted some #'s until they landed at $1B).

We're going to break down the terms of this offering, because details have been opaque in this space.

Understanding Convertible Notes

Your best source for understanding how these work would be Investopedia - you can find out more about them from the following links:

1. Senior Convertible Notes (full blown explainer; these are the type of convertible notes that MicroStrategy issued back in Feb. 2021) = https://www.investopedia.com/terms/s/senior-convertible-note.asp

2. Introduction to Convertible Bonds (as an overall investment class) = https://www.investopedia.com/investing/introduction-convertible-bonds/ (this is probably the best article to start with if you're new to the idea)

3. Convertible Notes - Pros and Cons for Companies and Investors (good for understanding how these are used in 'practice') = https://www.investopedia.com/articles/bonds/08/convertible-financing.asp

4. Conversion Premium (this is a relevant term that we're going to discuss in here in a second) = https://www.investopedia.com/terms/c/conversionpremium.asp

5. When Convertible Bonds Become Stock = https://www.investopedia.com/ask/answers/06/stockfromconvertiblebondorigin.asp

If you aren't familiar with Investopedia, they're a really good source for people that just want to know the basic 'English' behind what something is.

There may be no other site on the internet that's better at breaking down complex concepts in an easily digestible manner.

These guides are written with the assumption that the audience may not know a damn thing about finance, stocks, etc., so don't feel intimidated by any of these terms if you're not familiar with them.