MicroStrategy spent $1.38 billion from its cash reserve to repurchase $1.5 billion of zero-coupon convertible notes due 2029, settling the debt at an 8% discount to par.
The buyback consumed most of the company’s roughly $2 billion USD Reserve, leaving $871 million on hand. Bitcoin purchases were paused for the week as the balance sheet was restructured.
The Tysons Corner firm completed the privately negotiated transactions between May 11 and May 25, 2026, according to its filing.
The 2029 notes carry a 0% coupon and were issued in November 2024 to fund Bitcoin (BTC) accumulation that has since grown into record Bitcoin treasury holdings.
Paying $1.38 billion for $1.5 billion in face value locked in roughly $120 million of savings versus full repayment.
The deal also generated a “BTC Gain” of 4,391 bitcoin through the effective discount, the company said in its filing.
Total convertible notes outstanding fell from $8.2 billion to $6.7 billion after settlement, reducing future share-dilution risk if MSTR climbs above the $672 conversion price.
The shift marks active liability management for a firm previously associated with Strategy buying the dip rather than retiring debt.
President and CEO Phong Le framed the cash deployment as a disciplined capital decision, while CFO Andrew Kang said the company will rebuild the reserve through a mix of equity, credit, and digital capital instruments.
“We retired $1.5 billion of convertible debt for $1.38 billion in cash. Year to date, we have achieved BTC Yield of 13.3%,” read an excerpt in the announcement, citing Phong Le.
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Strategy did not add to its Bitcoin treasury during the past week as the deal closed, though it bought 24,869 BTC earlier in the May 11 to May 25 window using STRC preferred and MSTR equity proceeds.
The treasury now totals 843,738 BTC, worth roughly $65 billion at the current price near $77,031.
The pause echoes a recent Saylor Bitcoin skip and follows a stretch where STRC preferred outpaced ETFs on net accumulation.
With $6.7 billion of converts still outstanding, the next funding round will signal whether discount buybacks remain a recurring tool, even as some analysts flag potential collapse risk scenarios.
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