Strategy’s (formerly MicroStrategy) Stock Takes a Hit Amid Bitcoin Dip 📉💥
Strategy's stock (MSTR) plunged 11% after Bitcoin’s price dropped more than 3%. The stock has now fallen 55% from its November 2024 ATH, raising questions about potential forced liquidation of its Bitcoin holdings.
While The Kobeissi Letter suggests a forced liquidation is unlikely, they acknowledged the risk if Bitcoin's price crashes 50% or more, especially as Strategy relies heavily on convertible notes to finance Bitcoin purchases. The company holds around $43.4B in Bitcoin but has $8.2B in debt.
Michael Saylor’s 46.8% voting power could shield the company from liquidation efforts. However, challenges may arise as the company’s debt matures beyond 2027, and Bitcoin’s volatility could test its financial flexibility. The key concern is maintaining investor confidence during prolonged downturns.
