JudgeHardcase on Nostr: "Holders of notes may require MicroStrategy to repurchase their notes on September ...
"Holders of notes may require MicroStrategy to repurchase their notes on September 15, 2027 ... equal to 100% of the principal amount of the notes to be repurchased..."
The bottom line is if there were a severe enough downturn in the MSTR price (presumably due to a significant BTC bear market), once given the choice, the bond holders will obviously demand their money back rather than continue to hold on to an IOU for eventual shares worth anything less. There is a real possibility that such a scenario could leave MicroStrategy with no real choice other than to liquidate some of its BTC just to pay off these bond holders - which is all well and good for the bond holders; but, I think the resulting decrease in BTC per share would further crush the confidence - already bruised by the bear market - that shareholders have in this fly-wheel experiment; maybe for good.
Personally, I would set the threshold to trigger this scenario at about $50k BTC or less, and, FWIW I consider it highly unlikely that will be the case circa September 2027. However, given Bitcoin's track record, it's undeniably a real possibility (similar goes for the rest of the remaining outstanding convertible debt further out on the horizon).
It's easy - especially during a bull market - to hand-wave these concerns away as if some people just willfully don't understand.
https://www.microstrategy.com/press/microstrategy-announces-pricing-of-offering-of-convertible-senior-notes_09-18-2024
The bottom line is if there were a severe enough downturn in the MSTR price (presumably due to a significant BTC bear market), once given the choice, the bond holders will obviously demand their money back rather than continue to hold on to an IOU for eventual shares worth anything less. There is a real possibility that such a scenario could leave MicroStrategy with no real choice other than to liquidate some of its BTC just to pay off these bond holders - which is all well and good for the bond holders; but, I think the resulting decrease in BTC per share would further crush the confidence - already bruised by the bear market - that shareholders have in this fly-wheel experiment; maybe for good.
Personally, I would set the threshold to trigger this scenario at about $50k BTC or less, and, FWIW I consider it highly unlikely that will be the case circa September 2027. However, given Bitcoin's track record, it's undeniably a real possibility (similar goes for the rest of the remaining outstanding convertible debt further out on the horizon).
It's easy - especially during a bull market - to hand-wave these concerns away as if some people just willfully don't understand.
https://www.microstrategy.com/press/microstrategy-announces-pricing-of-offering-of-convertible-senior-notes_09-18-2024