Ah, dear reader, gather ’round as we delve into the curious case of MicroStrategy (MSTR), a company that has decided to play a game of financial chess with its 2027 convertible senior note tranche, a staggering sum of $1.05 billion! 🎩💰 They have issued a redemption notice, as if they were calling back wayward children from the streets of Kyiv, and will settle all conversion requests for this note offering. How noble!
In a proclamation worthy of a czar, the company declared on the 24th of January that note-holders have until the 24th of February to redeem their securities at a princely 100% of the principal amount. Or, if they fancy a bit of adventure, they may convert each $1,000 block of notes into Class A MicroStrategy stock at a mere $142 per share. What a bargain! Or is it? 🤔
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Potential trouble ahead?
Ah, digital assets! They are as fickle as a cat in a room full of rocking chairs, particularly sensitive to the whims of unrealized capital gains taxes due to the high volatility of the crypto markets. One might wonder if taxing unrealized capital gains is akin to trying to catch smoke with a net! 🐱👤
Such taxation not only discourages investment but could spell doom for companies like MicroStrategy, which have adopted a Bitcoin treasury strategy to preserve their purchasing power. A noble endeavor, indeed, but fraught with peril!
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In a bold move, the company’s most recent Bitcoin purchase on the 21st of January added 11,000 BTC to its balance sheet, the largest acquisition in 2025 thus far. A veritable feast for the financial gluttons! 🍽️
However, not all is rosy in this garden of wealth. David Krause, a finance professor at Marquette University, recently warned that Saylor’s Bitcoin acquisition strategy could erode shareholder equity. “Sudden, sharp drops in the price of Bitcoin could compromise MicroStrategy’s ability to pay back creditors and may even lead to bankruptcy,” he cautioned. A foreboding specter indeed! 👻
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2025-01-24 22:22