Michael Saylor, the founder of Strategy, has announced that the company intends to convert its $6 billion bond debt into equity. This strategic decision aims to decrease the company’s liabilities on its balance sheet.
On Sunday, Strategy stated via X that it could endure a drop in Bitcoin ($BTC) prices down to $8,000 while still maintaining enough assets to fully cover its outstanding debt. This declaration prompted a response from Saylor himself.
The firm currently holds Bitcoin reserves valued at approximately $49 billion, amounting to 714,644 $BTC.
With convertible debt totaling around $6 billion, Bitcoin’s price would need to decline by roughly 88% for the value of their holdings and debt obligations to match. Even then, Strategy asserts it would have sufficient assets to cover all debts.
Converting convertible bonds into equity means exchanging bondholder claims for shares in the company instead of repaying with cash. Essentially, this transforms creditors into shareholders.
This approach reduces financial pressure from debt but may dilute existing shareholders’ stakes since new shares are issued during conversion.
The firm insists that even if Bitcoin plummets by 88%, their convertible notes remain fully backed. Source: Strategy
Strategy’s Average Bitcoin Purchase Price Is About 10% Higher Than Current Market Value
The average acquisition cost per Bitcoin for Strategy stands near $76,000. Given today’s trading price around $68,400 per coin, this places their investment at an approximate 10% loss so far.
Related: Michael Saylor hints at another significant Bitcoin purchase amid market downturn
Saylor recently shared an accumulation chart on X indicating ongoing purchases—a typical sign he is buying more Bitcoins again.
If confirmed true, this would mark twelve consecutive weeks of acquisitions as the company continues building its position despite declines in both asset value and stock price.
MSTR Stock Has Fallen Roughly 70% From Its All-Time High
The stock ticker MSTR rose by 8.8% last Friday closing at about $133.88 according to Google Finance data.
This increase coincided with a brief rebound in Bitcoin prices back above $70K late Friday; however early Monday saw BTC retreat again near $68,400 based on CoinGecko figures.
MSTR shares remain down nearly seventy percent compared with their peak near mid-July when they reached around $456—reflecting broader market declines as BTC itself dropped roughly fifty percent since early October highs.
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