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Non-Tech : Kirk's Market Thoughts -- Ignore unavailable to you. Want to Upgrade?

To: carranza2 who wrote (24215)	5/2/2025 3:49:24 PM
From: #Breeze	2 Recommendations Recommended By Return to Sender toccodolce Respond to of 26422

C2, here's the characteristic of that MicroStrategy Debt. MicroStrategy has been using convertible debt to finance its Bitcoin purchases, but the debt is not directly convertible into Bitcoin. Instead, it is convertible into MicroStrategy's Class A common stock or cash, at the company's discretion, based on predefined terms. Here's a breakdown based on available information: Convertible to Bitcoin? No, MicroStrategy's convertible notes are not convertible into Bitcoin. They can be converted into shares of MicroStrategy’s Class A common stock, cash, or a combination of both, depending on the terms of the specific offering and MicroStrategy’s election. For example, in their November 2024 offering of $3 billion in convertible senior notes due 2029, the conversion rate was set at 1.4872 shares per $1,000 principal, equivalent to a conversion price of approximately $672.40 per share. Zero Coupon? Yes, several of MicroStrategy’s convertible debt offerings carry a 0% coupon rate, meaning they do not pay regular interest. For instance: In February 2021, MicroStrategy issued $900 million in convertible notes with a 0% coupon to buy Bitcoin. In November 2024, they completed a $3 billion offering of convertible senior notes due 2029, also with a 0% coupon. However, not all their debt is zero-coupon. Some offerings, like the $700 million convertible notes issued in March 2024, had a 0.625% coupon, and others, like a June 2021 senior secured notes offering, carried a 6.125% coupon. Strategy and Risks: MicroStrategy uses proceeds from these convertible notes to acquire Bitcoin, leveraging low or zero interest rates to minimize debt servicing costs. This strategy avoids using Bitcoin as collateral, reducing the risk of margin calls if Bitcoin prices drop. However, if Bitcoin’s value declines significantly, MicroStrategy could face challenges with debt repayment or shareholder dilution upon conversion, though forced Bitcoin sales are considered unlikely due to the structure and long maturities of the debt (2027–2032). In summary, MicroStrategy’s debt is convertible into stock or cash, not Bitcoin, and while many of their convertible notes carry a 0% coupon, some have low interest rates. This approach has fueled their Bitcoin acquisition strategy but carries risks tied to Bitcoin’s volatility and debt obligations. For the most current details on specific offerings, check MicroStrategy’s press releases or filings on their investor relations page ( (https://www.strategy.com/press/microstrategy-completes-3-billion-offering-of-convertible-senior-notes-due-2029-at-0-coupon-and-55-conversion-premium_11-21-2024)]https://www.microstrategy.com/en/investor-relations).[](https://www.strategy.com/press/microstrategy-completes-3-billion-offering-of-convertible-senior-notes-due-2029-at-0-coupon-and-55-conversion-premium_11-21-2024)