Bitcoin rally pushes strategy share towards record high

In 2020, Michael Saylor started an aggressive Bitcoin (BTC) purchasing policy with his company Strategy (MSTR). At the time, the race was around $ 11,600. In the following years, the company continued to buy BTC. On Monday, the digital currency reached a new all-time high of 123,200 dollars. This means that Strategy has a hefty profit on paper. This also translates into the share price.

Mstr share close to record high

At the time of writing, the strategy share is at a value of 442 dollars. As a result, it is approaching its highest rating ever. He reached it in November of last year and came to nearly 474 dollars. To achieve a new all-time High, an increase of only 7.2 percent is needed.

Thanks to the rising Bitcoin course, five of the six bonds are well in the win. This means that investors can convert their bonds into shares and make a profit immediately.

Strategy has bought a large part of its BTC by offering convertible bonds to investors. In essence, this works as a loan, with the condition that investors can exchange their debt for shares.

Most of the bonds that Strategy has issued continue until 2032. Investors have the option of converting their debt papers into MSTR shares as soon as the price exceeds a predetermined price. This level has already been reached in five of the six bonds. The only exception is the bond that expires in 2029, with a relatively high conversion price. Investors can only convert these into shares when the price reaches $ 672.40.

In total, Strategy spent a stunning $ 8.2 billion in convertible bonds, at a historically low average interest rate of only 0.421 percent. To realize the loans through this route, the company can buy very cheap BTC.

Strategy pauses bonds

This development is generally positive for the health of the company. If investors convert their bonds into shares, the fault of the balance of Strategy disappears. The loan is essentially ‘repaid’ in shares instead of cash. The debt position that the Saylor company has in that case is less. For existing shareholders it does mean dilution. There are more shares.

Yet the hunger for new Bitcoin bonds seems to decrease slightly. For the time being, Strategy has not issued any new convertible bonds. This may be a conscious choice to stay careful. Because the higher the bitcoin and share price at the time of issue, the greater the chance that investors demand stricter conditions, such as higher interest rates or lower conversion prices. It is also important to avoid too much dilution of the existing shareholders.