Michael Saylor's company MicroStrategy, recently renamed Strategy, has had trouble raising money to buy bitcoin.
That Saylor's plan to acquire $2 billion worth of BTC is in danger of collapsing is evidenced by the fact that Strategy lowered from 40-50% to 35% conversion premium, reflecting the amount by which the value of convertible bonds may exceed the market price of the company's shares at the time of exchange.
This means that holders of Strategy's convertible bonds will be able to exchange them for shares in the company when the spread between the bonds and shares is 35%, rather than the previous 40% or 50%. This is a way for Michael to entice investors who seem reluctant to buy bonds.
The difficulties that Strategy may have encountered were also noted by economist Peter Schiff, who has been a vocal critic Bitcoin :
Strategy's convertible bond sale doesn't seem to be going well. The firm's shares are down 4,5% today, despite a 2,5% gain in Bitcoin. With Strategy securities trading at a discount to the value of the Bitcoin on the company's balance sheet, selling Strategy shares to buy Bitcoin would be a loss.
The negative trend in Strategy stock market started on November 21, 2024, while Bitcoin continued to rise in price until mid-December, when its rate reached a historical maximum of about $107,000. It is obvious that the change in the value of the company's securities has not correlated with fluctuations in the BTC rate for a long time.
Strategy stock price falls
One of the key factors contributing to the fall in Strategy's share price is likely to be the organization's negative financial results. The company suffered losses every quarter of last year and went into the red by $670,8 million in the fourth quarter. Obviously, if the Bitcoin market does not resume its bullish rally, the company's securities will be in low demand due to the lack of dividends.
