Why #MicroStrategy Could Flood The Market With 1.6 Million Shares Of MSTR
MicroStrategy, a leading Bitcoin development company, faces a pivotal decision regarding its convertible bonds, which have surged in value alongside its stock.
Convertible Bonds and Stock Surge:
- MicroStrategy's stock (MSTR) has soared by 110% since the year's start, reaching $1440 per share. Its convertible bonds, issued in late 2020, now trade at over three times their par value.
Options for MicroStrategy:
- The company must decide whether to retire the bonds, paying investors $2.5 billion in cash, or allow them to mature in 2025, resulting in potential share conversion.
Potential Share Dilution:
- The conversion of 1.63 million shares could potentially flood the market, diluting shareholder value.
HODLing Bitcoin:
- MicroStrategy's wealth primarily lies in its #BitcoinHoldings , totaling 214,245 BTC valued at $14.9 billion. Executive chairman #MichaelSaylor reaffirms the company's commitment to holding Bitcoin indefinitely.
Financial Strategy:
- With minimal cash reserves, MicroStrategy's debt management strategy remains uncertain. Recent convertible note sales, generating $1.4 billion, were used to purchase additional Bitcoin.
Source - CryptoNews
