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 its next financial report in February 2025 has become a focus of market attention. Convertible bonds have always been MSTR’s main fundraising method, usually associated with its strategy of continuous Bitcoin purchases. However, the 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 potential market impact.
A traceable historical issuance pattern for MicroStrategy?
Market analysis believes that MSTR’s issuance pattern for convertible bonds 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, showing a 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 constraints:
1. 60-day lock-up period: Normally, within 60 days after the last issuance of convertible bonds, MSTR would not issue again, except for issuing new shares.
2. Avoidance of issuance before financial reports: MSTR has a historical tendency to avoid issuance within one month before the release of financial reports, which may be related to considerations of market stability.
Based on 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. Therefore, 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 limited options for new fundraising before the February financial report.
MSTR 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 noting. 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 peak 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 market confidence in Bitcoin and MSTR’s prospects.
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 Bitcoin holdings.
Expectations for early 2025
Taking into account lock-up periods, 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, the company’s financing options are basically limited. Bitcoin investors need to continue to monitor the changes in MSTR’s premium, as this data may reflect broader market sentiment and provide forward-looking guidance for market trends before the February 2025 financial report.
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