After the Bitcoin price fell below $100,000, it continued to decline, and everyone is paying attention to the movements of Bitcoin buyers. Among them, whether MicroStrategy (MSTR) can issue convertible bonds before its next earnings report in February 2025 has become the focus of the market. Convertible bonds have always been a major fundraising method for MSTR, usually associated with its ongoing strategy of buying Bitcoin. However, some timing restrictions may limit the company's operational space in the coming months.
Matrixport co-founder Daniel Yan also expressed views on this topic, pointing out that multiple factors may influence MSTR's fundraising plans and its potential market impact.
Is there a historical issuance pattern for MicroStrategy?
Market analysis suggests that MSTR's convertible bond issuance pattern has certain regularities. Daniel Yan points out that the company's last issuance of convertible bonds was on November 20, 2024, and the previous issuance dates were March 19, June 20, September 20, and November 20, indicating a tendency for quarterly operations. Therefore, the next possible issuance date may fall around February 20, 2025.
MicroStrategy convertible bond issuance timing
Daniel Yan believes that the timing of MSTR's issuance is influenced by two major constraints:
1. 60-day lock-up period: Generally, MSTR will not issue again within 60 days of the last convertible bond issuance, but market price issuance (ATM) is an exception. 2. Avoid issuance before earnings report: MSTR has a historical tendency to avoid issuance within one month prior to earnings report release, which may relate to considerations of market stability.
According to Yan's analysis, MSTR's next earnings report is scheduled to be released on February 4, 2025, while the previous release date was November 20, 2024, making the likelihood of releases in December and January almost zero.
Market price issuance is also restricted
In addition to convertible bonds, ATM issuance is also an important tool for MSTR's fundraising. However, Yan points out that the ATM issuance in January 2025 may also be subject to similar timing constraints. This indicates that the company has very few options for new fundraising before the February earnings report.
MSTR premium becomes a market sentiment indicator
Daniel Yan further emphasizes that in addition to the challenges of financing timing, the premium on MSTR stock is also worth noting. This premium reflects the valuation gap between MSTR's Bitcoin holdings and its stock price, serving as an important indicator of market sentiment towards Bitcoin.
In recent months, the MSTR premium has dropped significantly, from a high of 3.5 times in November 2024 to the current 1.9 times.
Bearish signal: If the premium further falls below 1.5 times, it may signal that market sentiment towards Bitcoin is turning pessimistic.
Bullish signal: If the premium rises above 2.0 times, it may indicate that the market is regaining confidence in the prospects of Bitcoin and MSTR.
Yan adds that MSTR's stock price and premium may experience greater volatility before the earnings report, and investors need to closely monitor this key indicator.
As of the deadline, MSTR's Bitcoin holdings amount to 439,000, with a coin price of $95,500, valued at $4.19 billion; MSTR's stock price is $364, with a market capitalization of $88.695 billion. The stock price is still 2.11 times that of Bitcoin holdings.
Expectations for early 2025
Considering the lock-up period, historical patterns, and market sentiment, Daniel Yan believes that MSTR is most likely to conduct the next convertible bond issuance around February 20, 2025, after the earnings report is released. Before that, the situation of limited financing options is basically certain. Bitcoin investors need to continue monitoring changes in the MSTR premium, as this data may reflect broader market sentiment and provide forward guidance for market trends before the February 2025 earnings report.
This article MSTR Convertible Bonds: Can They Be Issued Before February 2025? Stock Premium Becomes a Key Indicator first appeared in Chain News ABMedia.
