Can MSTR convertible bonds be issued before February 2025? Stock premium becomes a crucial indicator.
After the price of Bitcoin fell below 100,000, it continued to decline, and everyone is paying attention to the actions of Bitcoin buyers. Among them, whether MicroStrategy (MSTR) can issue convertible bonds before the next financial report in February 2025 has become a focus of market attention. Convertible bonds have always been MSTR’s main fundraising method, usually related to its strategy of continuously purchasing Bitcoin. However, certain time constraints may limit the company’s operational space in the next few months.
Daniel Yan, co-founder of Matrixport, also expressed his views on this topic, pointing out that several factors may affect MSTR’s fundraising plans and its potential market impact.
Is there a predictable pattern in MicroStrategy’s historical issuance model?
Market analysis believes that MSTR’s convertible bond issuance pattern has a certain regularity. Daniel Yan pointed out that the company’s last issuance of convertible bonds was on November 20, 2024, and the previous issuances were on March 19, June 20, September 20, and November 20, demonstrating its tendency for quarterly operations. Therefore, the next possible issuance date may be around February 20, 2025.
Timing of MSTR’s capital increase
Daniel Yan believes that the timing of MSTR’s capital increase is influenced by two major restrictions:
1. 60-day lock-up period: Typically, within 60 days after the previous issuance of convertible bonds, MSTR will not issue again, except for issuing new shares.
2. Avoidance of issuance before financial reports: MSTR has a historical tendency to avoid issuing within one month before the release of financial reports, which may be related to considerations of market stability.
According to Yan’s analysis, MSTR’s next financial report is scheduled to be released on February 4, 2025, and the last issuance date was November 20, 2024, so the possibility of issuance in December and January is almost zero.
In addition to convertible bonds, issuing new shares is also an important tool for MSTR’s fundraising. However, Yan pointed out that issuing new shares may also be subject to similar time constraints. This means that the company has almost no options for new fundraising before the February financial report.
MSTR’s premium as a market sentiment indicator
Daniel Yan further emphasized that in addition to the timing challenges of financing, the market’s premium on MSTR’s stock is also worth paying attention to. This premium reflects the valuation gap between MSTR’s Bitcoin holdings and its stock price, serving as an important indicator of market sentiment towards Bitcoin.
In recent months, MSTR’s premium has dropped significantly, from a high of 3.5 times in November 2024 to the current 1.9 times.
Bearish signal: If the premium further falls below 1.5 times, it may indicate a pessimistic sentiment towards Bitcoin in the market.
Bullish signal: If the premium rises above 2.0 times, it may indicate renewed confidence in the future of Bitcoin and MSTR.
Yan added that MSTR’s stock price and premium may experience greater volatility before the financial report, and investors need to closely monitor this key indicator.
As of the deadline, MSTR held 439,000 Bitcoins with a price of $95,000, totaling $41.7 billion; MSTR’s stock price was $364, with a market value of $88.695 billion. The stock price is still 2.22 times the value of Bitcoin holdings.
Expectations for early 2025
Taking into account the lock-up period, historical patterns, and market sentiment, Daniel Yan believes that MSTR is most likely to issue convertible bonds around February 20, 2025, after the financial report is released. Before that, its financing options are basically limited. Bitcoin investors need to continue monitoring changes in MSTR’s premium, as this data may reflect broader market sentiment and provide forward-looking guidance for market trends before the February financial report.
Risk reminder
Cryptocurrency investment carries a high level of risk, and prices may fluctuate dramatically, resulting in the potential loss of your entire investment. Please carefully assess the risks.
