MicroStrategy Is Pioneering Bitcoin Capital Markets, Bernstein Says
MicroStrategy has raised $4 billion of convertible debt to buy more bitcoin, according to a research report by broker Bernstein. The software firm currently holds 214,400 bitcoin worth approximately $14.5 billion. The company's long-term convertible debt strategy allows it to benefit from potential bitcoin upside with limited liquidation risk. When bitcoin's value increases, MicroStrategy can issue new debt, and when it decreases, the company can issue new shares to reduce leverage. Over the past four years, this strategy has increased MicroStrategy's bitcoin per equity share by nearly 67%. The company has not sold any bitcoin since it began buying in 2020 and is expected to continue raising capital to increase its holdings. Bernstein has given MicroStrategy stock an outperform rating with a $2,890 price target.
