MicroStrategy is managing $1.05 billion in corporate debt accrued from its substantial Bitcoin buying initiative. Under its co-founder and Executive Chairman Michael Saylor, the company has amassed a holding of 461,000 Bitcoin valued at nearly $49 billion. To finance these purchases, MicroStrategy issued convertible notes, a form of debt convertible into shares. The company plans to redeem its notes due in 2027 ahead of schedule, offering full principal repayment on February 24, 2025. These notes allow conversion to shares until February 20, at a rate tied to MicroStrategy's current stock price of $373.75, which has risen significantly over the last year. By redeeming these notes early, MicroStrategy reduces its leverage and defers repayment risk to September 2028, when another $1.01 billion in notes is due. The ongoing strategy of leveraging debt to buy Bitcoin raises concerns about the company's need to sell Bitcoin for debt repayment in the future, highlighting a complex financial strategy's potential risks.

Source đź”—