Strategy discounted buyback: $1.5 billion convertible bonds, with “selling Bitcoin” listed as a potential financing method

Bitcoin’s largest corporate holder, Strategy, has filed an 8-K with the SEC, confirming that it reached an agreement with investors on May 14 to repurchase a batch of zero-coupon convertible notes maturing in 2029. Settlement is expected to be completed around May 19. Strategy plans to spend approximately $1.38 billion to prepay this $1.5 billion debt.

Confirmed Terms and Funding Sources for the Convertible Bond Repurchase

Transaction timetable:

Agreement date: May 14, 2026

Expected settlement date: around May 19, 2026

Repurchase terms: repurchase $1.5 billion zero-coupon convertible notes (maturing in 2029) at par value; pay approximately $1.38 billion (about 92% of par); the final amount will be dynamically adjusted based on A-share VWAP; after the repurchase, all bonds will be canceled.

SEC 8-K filing confirms three main funding sources:

· the company’s existing cash reserves

· proceeds from an at-the-market offering at market prices

· selling Bitcoin

Post-transaction debt status: After the repurchase is completed, approximately $1.5 billion of the same-series 2029 zero-coupon convertible notes will remain outstanding, indicating the prior issuance total for that series was approximately $3 billion.

Saylor’s Official Confirmed Statements

Earlier this month, Michael Saylor, Executive Chairman of Strategy, made the following confirmed statements regarding concerns over selling coins:

“Net hoarder” stance: Saylor confirmed that the company positions itself as a “net hoarder,” committing that “for every 1 Bitcoin the company sells in the future, it will buy another 10 to 20,” ensuring the scale of purchases far exceeds the scale of sales.

Clear purpose for selling BTC: Saylor confirmed the company may sell a portion of its Bitcoin to pay dividends on its perpetual preferred shares, STRC.

Strategy current holdings (confirmed): holds 818,869 BTC, with a total value of over $66B based on the current market price, making it the publicly listed company holding the most Bitcoin globally.

FAQ

What is the financial significance of Strategy repurchasing convertible notes at a 92 discount?

Repurchasing at a discount to par (92%) is equivalent to saving the difference—about $120 million in this case. When the market’s secondary trading price is below par value, companies have direct financial benefits in repurchasing debt at a discount.

Does listing “selling Bitcoin” as a funding method mean Strategy is about to sell coins at a large scale?

Based on Saylor’s official statements, Strategy is a “net hoarder,” so even if it sells, it will be small-scale and purpose-driven (e.g., to pay STRC dividends); Saylor has committed to buying back 10 to 20 BTC for every 1 BTC sold. The SEC 8-K filing lists selling BTC as one of several “potential funding methods,” which is standard financial information disclosure and not a confirmed plan to sell.

After the transaction is completed, how much debt from the same series will still be outstanding?

Based on the confirmed information, after this repurchase, approximately $1.5 billion of the 2029 zero-coupon convertible notes will still be outstanding, implying the prior total issuance size for the same-series bonds was approximately $3 billion.