MicroStrategy’s Bitcoin Bet At Risk? CFA Investigates The ‘Debt Problem’

MicroStrategy, known as the largest corporate holder of Bitcoin (BTC), has again expanded its holdings. As revealed yesterday, the company purchased approximately 16,130 BTC in November (worth roughly $608 million at the current market rates). The acquisitions were executed at an average price of about $36,785 per Bitcoin, bringing MicroStrategy’s total holdings to 174,530 BTC.

The software firm, led by Michael Saylor, also disclosed its plans to potentially raise $750 million through the offering of class A common stock. Partners in this venture include Cowen and Company, Canaccord Genuity, and BTIG. This announcement, however, has sparked speculations across various social media platforms, suggesting that MicroStrategy might be grappling with a “debt problem.”

Does MicroStrategy Have A “Debt Problem”?

Patrick Flood, a Chartered Financial Analyst (CFA) and investment expert at LATAM Stocks has delved into these rumors to dispel the growing fear, uncertainty, and doubt (FUD) surrounding MicroStrategy’s debt situation. In his detailed analysis posted on X, Flood provided insights into the company’s financial standing and future prospects.

Flood asserts, “I am seeing a lot of FUD about MicroStrategy debt. People are concerned that Michael Saylor keeps buying Bitcoin instead of dealing with their ‘Debt problem.’ I suspect these people haven’t read the MSTR financials… I did. And I don’t think they have a debt problem, at all.”

He further elaborated that MicroStrategy’s immediate financial obligations are not pressing, as the company is not required to repay anything until December 15, 2025. This gives MicroStrategy ample time to either roll the debt or issue shares for repayment. However, Flood suggests that repaying the 2025 note might be unnecessary.

Explaining the mechanics of the 2025 and 2027 convertible notes, Flood highlights the conditions under which debt holders can opt for conversion. If Go to Source to See Full Article
Author: Jake Simmons

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