PANews reported on February 19 that, according to The Block, Strategy (formerly MicroStrategy) announced a few hours after issuing a profit warning that it plans to issue $2 billion in zero-interest convertible senior notes. Strategy intends to use the proceeds from this issuance for general corporate purposes, including the acquisition of BTC. Unless redeemed, repurchased or converted earlier, these bonds will mature on March 1, 2030. According to the announcement, Strategy will settle the conversion in cash, Class A common stock, or a combination of both. Strategy also plans to grant the initial purchasers an option to purchase up to an additional $300 million in notes within five business days after the issuance.
Earlier on Tuesday, Strategy issued a profit warning in a 10-K filing with the US SEC, citing the potential for increased tax liabilities. Strategy reviewed its net loss situation for the fiscal year ending December 31, 2024, primarily due to a $1.79 billion impairment loss on digital assets. The company warned that it "may not be able to restore profitability in the future," especially if its BTC holdings experience significant fair value losses. It added that a significant decline in the market value of BTC could adversely impact the company's ability to service its debt. Strategy stated that its enterprise analytics software business did not generate positive cash flow in 2024, and the company may need to rely on equity or debt financing to meet its financial obligations. The success of such financing will largely depend on the market value of its BTC holdings, and a significant drop in BTC value could trigger liquidity risks, potentially forcing the company to sell BTC at unfavorable prices. The company explained that this could have a material impact on its financial performance and future financing prospects. Strategy acquired approximately 258,320 BTC in 2024. After the latest acquisitions made between February 3 and 9, 2025, the company currently holds 478,740 BTC, worth over $46 billion.
