Bernstein: MicroStrategy will solely be pressured to liquidate its Bitcoin holdings within the face of utmost costs

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In a memo, Bernstein mentioned MicroStrategy (MSTR) is below stress to liquidate its bitcoin holdings as a result of its long-term debt financing plans.

However provided that there’s an excessive worth correction, particularly round mid-2025 debt maturity.

Rising Bitcoin costs imply MicroStrategy’s steadiness sheet will strengthen, boosting its share worth and making it simpler to service its debt with out having to promote its crypto holdings, the report mentioned.

Moreover, the power of the Bitcoin worth and rising inventory worth will permit the corporate to boost new debt and fairness and redeem present convertible bonds.

Conversely, if Bitcoin plummets and hits a totally depreciated worth, the worth of MicroStrategy’s holdings of cryptocurrency will be unable to cowl its debt and sure covenants past June 2025, leaving the company construction to prepay. You can be below stress from the clause.

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