Strategy to retire $1.5 billion in convertible notes at a discount, may sell bitcoin to fund buyback

Strategy (NASDAQ: MSTR) plans to repurchase $1.5 billion worth of debt at a discount and listed bitcoin sales as a potential funding source. 

The company entered into privately negotiated transactions with zero-coupon convertible note holders on May 14, with settlement expected on or about May 19, according to an 8-K filed with the SEC. In the deal, Strategy would pay approximately $1.38 billion total, retiring the debt at roughly 92 cents on the dollar. The notes were originally due in 2029. 

The final cash repurchase price is subject to adjustment based on the volume-weighted average price of Strategy’s Class A common stock during an agreed measurement period, meaning the actual outlay could shift before closing.

Strategy cited three potential funding sources for the buyback, including available cash reserves, proceeds from its at-the-market equity offering programs, and proceeds from the sale of bitcoin.

The inclusion of a bitcoin sale as a funding mechanism carries weight. Michael Saylor, Strategy’s executive chairman, clarified earlier this month that the firm operates as a “net accumulator” of bitcoin, as he tempered the news that Strategy might sell some of its holdings to meet obligations. 

In particular, Saylor had separately signaled that the company expects to sell some BTC to fund dividends on its high-yield STRC perpetual preferred stock, which it issued to raise capital to buy bitcoin. Though Strategy would now not only be buying bitcoins, the firm intends to maintain buying pressure by eventually replacing each coin sold with 10 to 20 more, Saylor said.

Strategy intends to cancel the repurchased notes following settlement. Approximately $1.5 billion in 2029 notes will remain outstanding after that cancellation, implying the company held roughly $3 billion in the instrument before the deal.

Strategy holds 818,869 bitcoin worth more than $66 billion at current prices, the largest corporate BTC stockpile per The Block’s treasury tracker.

The company added 535 BTC for $43 million last week, resuming purchases after a brief pause around its Q1 earnings release

JPMorgan analysts projected in May that Strategy’s bitcoin buying could reach $30 billion this year at its current pace, citing the capital efficiency of its STRC issuance program.

© 2026 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.