MicroStrategy ( MSTR ) is below stress to liquidate its Bitcoin holdings on account of its long-term plan to boost debt, based on a Bernstein report.
However solely within the case of an excessive value correction, particularly round 2025. for the center time period of the debt.
The report says rising Bitcoin costs imply MicroStrategy has a stronger steadiness sheet, greater inventory value and simpler debt repayments with out having to promote the cryptocurrency it holds.
Moreover, robust bitcoin costs and a better inventory value enable the corporate to boost new debt or fairness and redeem current convertible bonds.
Conversely, if Bitcoin falls to a completely crushing value, the worth of MicroStrategy’s holdings of cryptocurrencies won’t be able to cowl its debt and sure liabilities past 2025. in June and the company construction will come below stress because of the prepayment clause.
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