Strategy Company is furthering its Bitcoin acquisition strategy by issuing $2 billion in bonds for future investments.
New Bond Offering
Strategy has announced a $2 billion convertible bond issuance aimed at expanding its Bitcoin investments. These bonds, available only to qualified institutional buyers, are interest-free and can be converted into cash or company shares based on Strategy's decision. The bonds may be redeemed if the company’s stock price reaches a predetermined level.
Bitcoin Acquisition Strategy
For several years, Strategy has been using debt to purchase Bitcoin. Currently, the company holds 447,470 BTC, valued at $23.9 billion. The main risk of this strategy lies in the potential decline of the Bitcoin market, which could impact the company's ability to meet its financial obligations.
Financial Risks and Accounting Changes
Starting January 2025, new FASB accounting rules will account for both Bitcoin gains and losses in net income. Simultaneously, unrealized gains may increase the company's tax liabilities, including the 15% Corporate Minimum Tax.
Despite the financial uncertainties and accounting changes, Strategy continues to heavily invest in Bitcoin, aiming for long-term value growth.
