🔴MicroStrategy, the largest corporate holder of Bitcoin, owns 386,700 BTC worth $36 billion, while carrying a total debt of $7.2 billion. The company’s strategy involves leveraging funds through convertible bond issuance, enabling it to purchase more Bitcoin.
🔴MSTR shares have surged 450% in 2024, outperforming the S&P 500. However, their value is closely tied to Bitcoin’s price, with fluctuations amplified by 1.5–2 times. When Bitcoin’s price rises, the bonds can be converted into equity, reducing the company’s debt burden.
🔴Risks escalate during Bitcoin downturns, as the company may need to cover its debt using cash or by liquidating assets. Analysts caution that this high-leverage approach is perilous during market corrections.