Michael Saylor's MicroStrategy Faces Risk If MSTR's 0% Convertible Bond Lenders Recall Non-Recourse Loans Due To Covenant Breach: Here's What It Means For Investors

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Michael Saylor's MicroStrategy Faces Risk If MSTR's 0% Convertible Bond Lenders Recall Non-Recourse Loans Due To Covenant Breach: Here's What It Means For Investors

Benzinga01-13

Bitcoin‘s BTC/USD levered play MicroStrategy Inc MSTR could face the risk of redemption on its 0% convertible debt upon the occurrence of unforeseen events breaching the covenants governing these ...

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Guavaxf30
·01-13
This part scares the shit out of me. "MicroStrategy has plans to raise up to $2 billion through preferred stock offerings in the first quarter of 2025. This capital will fund additional Bitcoin purchases as part of its "21/21 Plan," which outlines a strategy to secure $21 billion in equity and $21 billion in fixed-income instruments over the next three years. As a result, changes in bitcoin prices and the limited supply of the asset could create massive volatility for the company." At the moment, Bitcoin has fallen below $91,000. If it breaks &90,000, I fear there will be a massive collapse in the stock price of MSTR. And all that this article is warning about may be triggered.
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Despite this, any huge price swings could impact the company with the largest Bitcoin reserves.\nCEO Michael Saylor‘s MicroStrategy holds 2.116% of the total BTC supply or a total of 444,262 coins, valued at $41.249 billion.\nAccording to its regulatory filings and earnings reports, in the past five years, MicroStrategy has raised $7.27 billion through convertible debt offerings. \nWith a non-recourse loan, which is more beneficial to borrowers, a lender cannot pursue any of the borrower’s assets in the event of default, except the ones that have been used as collateral.\nIn the case of MSTR’s 0% convertible bonds, it has no collateral and the default trigger is solely contingent on other financial debt covenants.\nSee Also: Michael Saylor’s MicroStrategy Convertible Notes To Buy Bitcoin Offer No Interest, So Why Are Investors Rushing To Buy Them?\nWhy It Matters: If the BTC prices were to fall sharply, the shares of its levered play MSTR will decline too, leading to an erosion in its market capitalization.\nThus, such an event, despite Bitcoin’s not being a direct collateral for the company, could lead the lender to recover 100% of their principal.\nIn order to shield themselves from this, MicroStrategy has been rolling over their old debts by issuing new ones and also plans to raise monies via additional equity issuance, which could eventually help them with ample liquidity if any corporate event occurs.\nMicroStrategy has plans to raise up to $2 billion through preferred stock offerings in the first quarter of 2025. This capital will fund additional Bitcoin purchases as part of its \"21/21 Plan,\" which outlines a strategy to secure $21 billion in equity and $21 billion in fixed-income instruments over the next three years.\nAs a result, changes in bitcoin prices and the limited supply of the asset could create massive volatility for the company.\nRead Next:\n\nIntel Stock Has Fallen Over 58% In 1 Year, But Citi Maintains ‘Neutral’ Rating On Expected Replacement Of Pat Gelsinger In A ‘Couple Of Months’\n\nImage via Shutterstock $BTCBitcoin$92622.57-1.98%WatchlistOverviewMSTRMicroStrategy Inc$316.55-3.46%Market News and Data brought to you by Benzinga APIs© 2025 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"-1","news_tag":"shareholding","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[{"id":392152288395456,"gmtCreate":1736772141918,"gmtModify":1736775516438,"author":{"id":"3576140222331577","authorId":"3576140222331577","name":"Guavaxf30","avatar":"https://static.tigerbbs.com/1ff15ff6aa254c9130f9af922f7e2447","vip":1,"crmLevel":9,"crmLevelSwitch":1,"idStr":"3576140222331577","authorIdStr":"3576140222331577"},"htmlText":"This part scares the shit out of me. \"MicroStrategy has plans to raise up to $2 billion through preferred stock offerings in the first quarter of 2025. This capital will fund additional Bitcoin purchases as part of its \"21/21 Plan,\" which outlines a strategy to secure $21 billion in equity and $21 billion in fixed-income instruments over the next three years. As a result, changes in bitcoin prices and the limited supply of the asset could create massive volatility for the company.\" At the moment, Bitcoin has fallen below $91,000. If it breaks &amp;90,000, I fear there will be a massive collapse in the stock price of MSTR. And all that this article is warning about may be triggered.","listText":"This part scares the shit out of me. \"MicroStrategy has plans to raise up to $2 billion through preferred stock offerings in the first quarter of 2025. This capital will fund additional Bitcoin purchases as part of its \"21/21 Plan,\" which outlines a strategy to secure $21 billion in equity and $21 billion in fixed-income instruments over the next three years. As a result, changes in bitcoin prices and the limited supply of the asset could create massive volatility for the company.\" At the moment, Bitcoin has fallen below $91,000. If it breaks &amp;90,000, I fear there will be a massive collapse in the stock price of MSTR. And all that this article is warning about may be triggered.","text":"This part scares the shit out of me. \"MicroStrategy has plans to raise up to $2 billion through preferred stock offerings in the first quarter of 2025. This capital will fund additional Bitcoin purchases as part of its \"21/21 Plan,\" which outlines a strategy to secure $21 billion in equity and $21 billion in fixed-income instruments over the next three years. As a result, changes in bitcoin prices and the limited supply of the asset could create massive volatility for the company.\" At the moment, Bitcoin has fallen below $91,000. If it breaks &90,000, I fear there will be a massive collapse in the stock price of MSTR. And all that this article is warning about may be triggered.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/392152288395456","repostId":2503371396,"repostType":2,"repost":{"id":"2503371396","kind":"highlight","pubTimestamp":1736762715,"share":"https://ttm.financial/m/news/2503371396?lang=&edition=fundamental","pubTime":"2025-01-13 18:05","market":"us","language":"en","title":"Michael Saylor's MicroStrategy Faces Risk If MSTR's 0% Convertible Bond Lenders Recall Non-Recourse Loans Due To Covenant Breach: Here's What It Means For Investors","url":"https://stock-news.laohu8.com/highlight/detail?id=2503371396","media":"Benzinga","summary":"Bitcoin‘s (CRYPTO: BTC) levered play MicroStrategy Inc (NASDAQ:MSTR) could face the risk of redemption on its 0% convertible debt upon the occurrence of unforeseen events breaching the covenants governing these notes ","content":"<html><body><div itemprop=\"articleBody\" itemscope=\"\" itemtype=\"https://schema.org/Article\"><div><p><strong>Bitcoin</strong>‘s <span>BTC/USD</span> levered play <strong><a href=\"https://laohu8.com/S/MSTR\">MicroStrategy</a> Inc</strong> <span>MSTR</span> could face the risk of redemption on its 0% convertible debt upon the occurrence of unforeseen events breaching the covenants governing these notes despite the bonds being an unsecured, senior obligation.</p>\n<p><strong>What Happened:</strong> Bitcoin prices have dropped over 8.63% in the last one-month and it’s approximately 17% below the all-time high of $108,319.87, as of Jan. 13.</p>\n<p>The cryptocurrency is not collateral for the 0% convertible notes as these notes are unsecured. Despite this, any huge price swings could impact the company with the largest Bitcoin reserves.</p>\n<p>CEO <strong>Michael Saylor</strong>‘s MicroStrategy holds 2.116% of the total BTC supply or a total of 444,262 coins, valued at $41.249 billion.</p>\n<p>According to its regulatory filings and earnings reports, in the past five years, MicroStrategy has raised $7.27 billion through convertible debt offerings. </p>\n<p>With a non-recourse loan, which is more beneficial to borrowers, a lender cannot pursue any of the borrower’s assets in the event of default, except the ones that have been used as collateral.</p>\n<p>In the case of MSTR’s 0% convertible bonds, it has no collateral and the default trigger is solely contingent on other financial debt covenants.</p>\n<p><strong>See Also: Michael Saylor’s MicroStrategy Convertible Notes To Buy Bitcoin Offer No Interest, So Why Are Investors Rushing To Buy Them?</strong></p>\n<p><strong>Why It Matters: </strong>If the BTC prices were to fall sharply, the shares of its levered play MSTR will decline too, leading to an erosion in its market capitalization.</p>\n<p>Thus, such an event, despite Bitcoin’s not being a direct collateral for the company, could lead the lender to recover 100% of their principal.</p>\n<p>In order to shield themselves from this, MicroStrategy has been rolling over their old debts by issuing new ones and also plans to raise monies via additional equity issuance, which could eventually help them with ample liquidity if any corporate event occurs.</p>\n<p>MicroStrategy has plans to raise up to $2 billion through preferred stock offerings in the first quarter of 2025. This capital will fund additional Bitcoin purchases as part of its \"21/21 Plan,\" which outlines a strategy to secure $21 billion in equity and $21 billion in fixed-income instruments over the next three years.</p>\n<p>As a result, changes in bitcoin prices and the limited supply of the asset could create massive volatility for the company.</p>\n<p><strong>Read Next:</strong></p>\n<ul>\n<li><strong>Intel Stock Has Fallen Over 58% In 1 Year, But Citi Maintains ‘Neutral’ Rating On Expected Replacement Of Pat Gelsinger In A ‘Couple Of Months’</strong></li>\n</ul>\n<p><em>Image via Shutterstock</em></p> </div><div><div><div><div><div><div><div><span><img decoding=\"async\" src=\"data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7\"/><noscript><img decoding=\"async\" loading=\"lazy\" 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decoding=\"async\" src=\"data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7\"/><noscript><img decoding=\"async\" loading=\"lazy\" src=\"https://image-util.benzinga.com/api/v2/logos/file/image/1050446/mark_vector_light__210fab6c85aaccad9f85926b11a6d342.svg?x-bz-cred=sb~aq5CZRUNgtNzSsHolaFg2fViQkeRESwB_SwwqnCLf17cb75l8DPDsmd9N-k5EqvXNZOsESjRMChUge64qr3XRj3aicAWxz5YkaLwG8C8lz573_TWdxH20mjf5uTAw0yIg103XXwaK-vxP5ObkuLWpgtWZJ6U&amp;x-bz-exp=1736848472&amp;x-bz-security-isin=US5949724083&amp;x-bz-security-symbol=MSTR&amp;x-bz-signature=53ba85ea646855505fc23e0c23ffdfd9e27a2574c59021d035492a2d115436c9\" 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2x\"/></noscript></span></div><div><div><span>MSTR</span><span>MicroStrategy Inc</span></div><div><span>$316.55</span><span>-3.46%</span></div></div></div></div></div></div></div><div></div>Market News and Data brought to you by Benzinga APIs<p>© 2025 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.</p></div></body></html>","source":"Benzinga","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Michael Saylor's MicroStrategy Faces Risk If MSTR's 0% Convertible Bond Lenders Recall Non-Recourse Loans Due To Covenant Breach: Here's What It Means For Investors</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; 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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nMichael Saylor's MicroStrategy Faces Risk If MSTR's 0% Convertible Bond Lenders Recall Non-Recourse Loans Due To Covenant Breach: Here's What It Means For Investors\n</h2>\n\n<h4 class=\"meta\">\n\n\n2025-01-13 18:05 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.benzinga.com/general/market-summary/25/01/42938954/michael-saylors-microstrategy-faces-risk-if-mstrs-0-convertible-bond-lenders-recall-non-recourse-loans-due-to-covenant-breach-heres-what-it-means-for-investors><strong>Benzinga</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Bitcoin‘s BTC/USD levered play MicroStrategy Inc MSTR could face the risk of redemption on its 0% convertible debt upon the occurrence of unforeseen events breaching the covenants governing these ...</p>\n\n<a href=\"https://www.benzinga.com/general/market-summary/25/01/42938954/michael-saylors-microstrategy-faces-risk-if-mstrs-0-convertible-bond-lenders-recall-non-recourse-loans-due-to-covenant-breach-heres-what-it-means-for-investors\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"https://www.benzinga.com/files/images/story/2025/01/13/Shkreli-Advice-For-Saylor.jpeg","relate_stocks":{"BK4211":"区域性银行","BK4600":"加密货币概念","BK4023":"应用软件","MSTR":"MicroStrategy","BK4601":"加密货币现货ETF","ISBC":"投资者银行","BK4585":"ETF&股票定投概念","BK4594":"比特币ETF概念","BK4588":"碎股","BK4516":"特朗普概念","BK4595":"比特币概念","BK4596":"哈里斯概念"},"source_url":"https://www.benzinga.com/general/market-summary/25/01/42938954/michael-saylors-microstrategy-faces-risk-if-mstrs-0-convertible-bond-lenders-recall-non-recourse-loans-due-to-covenant-breach-heres-what-it-means-for-investors","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2503371396","content_text":"Bitcoin‘s BTC/USD levered play MicroStrategy Inc MSTR could face the risk of redemption on its 0% convertible debt upon the occurrence of unforeseen events breaching the covenants governing these notes despite the bonds being an unsecured, senior obligation.\nWhat Happened: Bitcoin prices have dropped over 8.63% in the last one-month and it’s approximately 17% below the all-time high of $108,319.87, as of Jan. 13.\nThe cryptocurrency is not collateral for the 0% convertible notes as these notes are unsecured. Despite this, any huge price swings could impact the company with the largest Bitcoin reserves.\nCEO Michael Saylor‘s MicroStrategy holds 2.116% of the total BTC supply or a total of 444,262 coins, valued at $41.249 billion.\nAccording to its regulatory filings and earnings reports, in the past five years, MicroStrategy has raised $7.27 billion through convertible debt offerings. \nWith a non-recourse loan, which is more beneficial to borrowers, a lender cannot pursue any of the borrower’s assets in the event of default, except the ones that have been used as collateral.\nIn the case of MSTR’s 0% convertible bonds, it has no collateral and the default trigger is solely contingent on other financial debt covenants.\nSee Also: Michael Saylor’s MicroStrategy Convertible Notes To Buy Bitcoin Offer No Interest, So Why Are Investors Rushing To Buy Them?\nWhy It Matters: If the BTC prices were to fall sharply, the shares of its levered play MSTR will decline too, leading to an erosion in its market capitalization.\nThus, such an event, despite Bitcoin’s not being a direct collateral for the company, could lead the lender to recover 100% of their principal.\nIn order to shield themselves from this, MicroStrategy has been rolling over their old debts by issuing new ones and also plans to raise monies via additional equity issuance, which could eventually help them with ample liquidity if any corporate event occurs.\nMicroStrategy has plans to raise up to $2 billion through preferred stock offerings in the first quarter of 2025. This capital will fund additional Bitcoin purchases as part of its \"21/21 Plan,\" which outlines a strategy to secure $21 billion in equity and $21 billion in fixed-income instruments over the next three years.\nAs a result, changes in bitcoin prices and the limited supply of the asset could create massive volatility for the company.\nRead Next:\n\nIntel Stock Has Fallen Over 58% In 1 Year, But Citi Maintains ‘Neutral’ Rating On Expected Replacement Of Pat Gelsinger In A ‘Couple Of Months’\n\nImage via Shutterstock $BTCBitcoin$92622.57-1.98%WatchlistOverviewMSTRMicroStrategy Inc$316.55-3.46%Market News and Data brought to you by Benzinga APIs© 2025 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"hasMoreComments":true,"newsSizeData":{"likeSize":1,"commentSize":1,"repostSize":1,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false}}