Strategy Announces Issuance of $2 billion convertible bonds to Support Future Bitcoin Purchase

PANews reported on February 19 that according to The Block, Strategy (formerly MicroStrategy) said on Tuesday that it plans to issue $2 billion in zero-interest convertible premium bonds several hours after issuing a profit warning. Strategy intends to use the proceeds from the issuance for general corporate purposes, including the acquisition of Bitcoin. Unless they are repurchased, redeemed or converted in advance, these bonds will expire on March 1, 2030. According to the announcement, Strategy will settle the conversion in cash, Class A common stock or a combination of both. Strategy also plans to grant initial buyers the option to purchase up to $300 million in additional bonds within five business days of issuance.

Earlier on Tuesday, Strategy issued a profit warning in a 10-K filing file with the U.S. SEC, due to the potential tax burden that could increase. Strategy reviewed the net loss for the fiscal year ended December 31, 2024, mainly due to the impairment loss of digital assets of US$1.79 billion. The company warned that “profitability may not be restored in the future”, especially if there is a significant fair value loss in its Bitcoin holdings. It added that a sharp drop in the value of the Bitcoin market could have an adverse impact on the company's debt repayment ability. Strategy said its enterprise analytics software business did not generate positive cash flow in 2024 and the company may need to rely on equity or debt financing to meet its financial obligations. The success of such financing depends largely on the market value of its Bitcoin holdings, and a sharp decline in Bitcoin’s value could trigger liquidity risks that could force companies to sell Bitcoin at unfavorable prices. The company explained that this could have a significant impact on its financial performance and future financing prospects. Strategy acquired approximately 258,320 BTC in 2024. The company currently holds 478,740 BTC worth over $46 billion after its latest acquisition between February 3 and 9, 2025.