MicroStrategy (MSTR) is becoming the center of discussion as there are rumors that the company may temporarily suspend its Bitcoin (BTC) purchase strategy in January 2025, due to restrictions related to the blackout period in the issuance of stocks or convertible bonds.
Blackout is a period of time when public companies temporarily suspend certain activities related to their securities. These restrictions are often applied to comply with internal regulations or to avoid suspicions of insider trading.
Renowned venture investor Vance Spencer predicts that Michael Saylor, the CEO of MicroStrategy, will face restrictions in January 2025, making it difficult to issue convertible bonds to buy more Bitcoin.
"Saylor will not be able to issue any conversion orders to buy BTC in January. He may maximize the opportunity to buy Bitcoin before December 31, after which it will be the 'altcoin season,'" Spencer shared on X (formerly Twitter).
Some experts believe the blackout period may stem from insider trading regulations. Although the U.S. Securities and Exchange Commission (SEC) does not prohibit insider trading after the end of the financial quarter, many companies still self-impose trading bans to protect their reputation.
These periods usually last from two weeks to a month, ending after the company releases its financial reports. Some other opinions suggest that the restrictions may only apply to at-the-market (ATM) stock sales - a way of selling stocks directly to the market without an official issuance - and not affect convertible bonds.
"I think MicroStrategy's blackout period is exaggerated in both duration and impact. The company has established a transparent process for its market transactions and is likely to continue buying BTC, even during the financial reporting period," an analyst commented.
MicroStrategy currently holds $46.02 Bit of BTC, with an unrealized profit of over $18.9 Bit. In December 2024 alone, the company spent over $3 Bit to buy BTC at a price above $100,000.
