Strategy to equitize convertible debt over 3-6 years: Saylor

Strategy founder Michael Saylor has revealed the firm plans to convert its $6 billion in bond debt into equity — a move that reduces debt on the balance sheet.

“Strategy can withstand a drawdown in $BTC price to $8,000 and still have sufficient assets to fully cover our debt,” stated the firm on X on Sunday, prompting Saylor’s response.

The Bitcoin ($BTC) treasury company currently holds $49 billion in Bitcoin reserves with a stash of 714,644 $BTC.

Its convertible debt is around $6 billion, so $BTC would need to fall around 88% for the two to be equal, and it still has enough to cover the debt, the firm explained.

Equitizing convertible debt means converting the bond debt into equity as stock shares rather than repaying it in cash, essentially turning bondholders into shareholders.

The move would reduce debt pressure on the company, but it can also dilute existing shareholders because new stock is issued.

The firm claims convertible debt notes are fully covered even if Bitcoin tanks 88%. Source: Strategy

Strategy down 10% on average $BTC purchase price

The average Bitcoin purchase price for Strategy is around $76,000, which means the firm is currently down around 10% on its investment with the asset trading at $68,400.

Related: Michael Saylor signals another Bitcoin buy amid market rout

Meanwhile, Saylor signaled another Bitcoin buy as he posted the Strategy accumulation chart on X on Sunday, a typical sign of a purchase.

The purchase would mark 12 consecutive weeks of buying as the company continues to accumulate despite a sharp decline in the underlying asset and its stock price.

Strategy stock down 70% from ATH

Strategy stock (MSTR) climbed 8.8% on Friday to end the week trading at $133.88, according to Google Finance.

The move came as Bitcoin recovered the $70,000 level again in late trading on Friday, but that recovery was short-lived as it lost some of those gains in early trading on Monday morning, falling to $68,400, according to CoinGecko.

Meanwhile, shares in the company are down 70% from their mid-July all-time high of $456, as $BTC prices have fallen 50% from their peak in early October.

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