The price of Bitcoin has fallen below $100,000 and continues to decline, with everyone paying attention to the movements of Bitcoin buyers. Among them, whether MicroStrategy (MSTR) will be able to issue convertible bonds before its next earnings report in February 2025 has become a market focus. Convertible bonds have always been MSTR's main financing method, usually related to its strategy of continuous Bitcoin purchases. However, certain time constraints may limit the company's operational space in the coming months.
Matrixport co-founder Daniel Yan also shared his views on this topic, pointing out that multiple factors may affect MSTR's financing plans and its potential market impact.
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ToggleIs there a traceable pattern in MicroStrategy's historical issuance model?
Market analysis suggests that MSTR's convertible bond issuance model has a certain regularity. Daniel Yan pointed out that the company's last convertible bond issuance was on November 20, 2024, and the previous issuance dates were March 19, June 20, September 20, and November 20, showing a tendency towards quarterly operations. Therefore, the next possible issuance date may be around February 20, 2025.
MicroStrategy's convertible bond issuance timing
Daniel Yan believes that MSTR's issuance timing is affected by two major constraints:
1. 60-day lock-up period: Normally, MSTR will not issue again within 60 days after the previous convertible bond issuance, but at-the-market (ATM) issuance is an exception.
2. Avoid issuance before earnings reports: MSTR has a historical tendency to avoid issuance within one month before the earnings report release, which may be related to considerations about market stability.
According to Yan's analysis, MSTR's next earnings report is scheduled to be released on February 4, 2025, and the last issuance date was November 20, 2024, so the possibility of issuance in December and January is almost zero.
At-the-market (ATM) issuance is also limited
In addition to convertible bonds, ATM issuance is also an important financing tool for MSTR. However, Yan pointed out that the ATM issuance in January 2025 may also be subject to similar time constraints. This means that the company has almost no other new financing options before the February earnings report.
MSTR premium becomes a market sentiment indicator
Daniel Yan further emphasized that in addition to the challenges of financing timing, the market premium on MSTR stock is also worth watching. This premium reflects the valuation gap between MSTR's Bitcoin holdings and its stock price, and is an important indicator of the market's sentiment towards Bitcoin.
In recent months, MSTR's premium has dropped significantly, from a high of 3.5 times in November 2024 to the current 1.9 times.
- Bearish signal: If the premium falls below 1.5 times, it may indicate that the market sentiment towards Bitcoin is becoming pessimistic.
- Bullish signal: If the premium rebounds to above 2.0 times, it may indicate that the market has regained confidence in the prospects of Bitcoin and MSTR.
Yan added that MSTR's stock price and premium may experience greater volatility before the earnings report, and investors need to closely monitor this key indicator.
As of the editorial deadline, MSTR's Bitcoin holdings were 439,000 BTC, with a price of $95,500 per BTC, valued at $41.9 billion; MSTR's stock price was $364, with a market capitalization of $88.695 billion. The stock price is still 2.11 times the value of the Bitcoin holdings.
Expectations for early 2025
Considering the lock-up period, historical patterns, and market sentiment, Daniel Yan believes that MSTR is most likely to issue its next convertible bonds around February 20, 2025, i.e., after the earnings report release. Before that, the company's financing options will be limited. Bitcoin investors need to continue to monitor the changes in MSTR's premium, as this data may reflect broader market sentiment and provide forward-looking guidance for the market dynamics before the February 2025 earnings report.
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