Strategy Stock In Trouble

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Strategy Stock In Trouble

Strategy (Mstr) Stock In Trouble As Bitcoin Falls

Strategy (MSTR), which was once known as MicroStrategy, boasts a large Bitcoin (BTC) holding. So in a sense, we can say that it is just a digital asset holder with its value tied to the BTC price.

Whenever the Bitcoin (BTC) price rises, it also leads to a huge upside in the Strategy (MSTR) stock. Just like that, any major decline in the Bitcoin (BTC) price also sends the Strategy (MSTR) stock lower.

Strategy (Mstr) Holds 650,000 Bitcoins

Even now, Strategy (MSTR) has around 650,000 Bitcoins, which is a lot. But that's only 3.1% of the total supply of Bitcoin (BTC). However, even holding the 650K Bitcoins makes Strategy (MSTR) one of the largest corporate holders in the world.

The recent slump in the Strategy (MSTR) stock is mainly due to Bitcoin losing the $100K handle. And now, investors are worried that Strategy (MSTR) might be forced to sell its BTC holdings if the price continues to drop.

According to the management, they have $8.2 billion worth of convertible debt. In addition, they also have a preferred equity of $6.6 billion. Also, Strategy (MSTR) has paid off its loan from the Silvergate Bank in the year 2023.

The bottom line is that the Strategy (MSTR) stock is definitely under pressure. But according to the CEO, they will only sell the BTC holdings if the price continues to decline.

And if the Strategy (MSTR) loses access to the debt markets and equity, that would also be a reason to sell the BTC holdings.

To give you some perspective, Strategy (MSTR) will only become close to bankruptcy if BTC drops to $25000. So, yes! Strategy (MSTR) stock is still not under immediate danger as BTC is far away from $25K.

Also, it is normal for cryptocurrencies like BTC to dip and go through periods of downtrends. So, the Strategy (MSTR) stock is likely to sell its BTC holdings anytime soon, and there is no immediate danger.

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