CoinShares said in a research blog that MicroStrategy's (MSTR) ambitious plan to buy $42 billion worth of Bitcoin (BTC) is not without risk.
Whether MicroStrategy can successfully execute its bitcoin acquisition plan depends on a number of factors, CoinShares said. Analysts believe the software company needs to "maintain favorable financing conditions and needs demand for its convertible notes". The cost of servicing debt is also rising. In 2021, MicroStrategy was able to raise debt in zero-coupon convertible bonds, but those coupons have been rising since as new bonds are issued, CoinShares noted. CoinShares said the company's "bitcoin business may have outpaced its software business", adding that cash flow from traditional businesses may not be sufficient to cover future coupon payments.
CoinShares: MicroStrategy's $42 billion Bitcoin Acquisition Strategy Has Certain Risks
2024-11-05 22:46:59
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