MicroStrategy unlikely to be forced to sell Bitcoin next downturn

Bitcoin analyst Willy Woo said MicroStrategy is unlikely to be forced to sell its Bitcoin holdings to cover debt in the next major market downturn, though he warned of a narrow scenario in which partial sales could become necessary. Woo made the comments on X on Wednesday as markets weighed MicroStrategy’s convertible debt profile and the company’s large crypto treasury.

MicroStrategy’s outstanding debt is predominantly convertible senior notes that include a holder put right dated September 15, 2027, and the company has contractual flexibility to settle conversions in cash, in common stock, or by a combination of both, at its election. Woo calculated that, to avoid having to liquidate Bitcoin to meet obligations, MicroStrategy’s share price would need to trade above about $183.19 around the debt date. That figure corresponds roughly to a Bitcoin price near $91,500, assuming a multiple of net asset value of one.

MicroStrategy holds roughly 641,205 Bitcoin, a stake valued at about $64 billion at current prices, according to public trackers. The company’s stock recently closed at a seven month low near $247, while Bitcoin has been trading around $101,000 in the past week. Analysts...