Nostr Web Client

I've owned for a long time. Are you asking what happens if they are forced to liquidate? When BTC went down to 15k they were trading slightly below the value of the treasury. Currently they are about 4x treasury (rough math). All of the convertible debt contracts are long term, so liquidation risk is pretty low.

Humble Bitcoiner 1y ago

Explain me how liquidation risk is low

What happens if BTC drops -85% in 2026?

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Discussion

Orange Pilled Dictator 1y ago

He only has to liquidate if individual contracts are calling the debt. The contacts are lattered.

Humble Bitcoiner 1y ago

Alright understood

🐢 1y ago

The debt is issued as converts, if they call the debt, they receive equity shares, not cash.

Orange Pilled Dictator 1y ago

I'm not saying the risk is 0, but, we've seen them deal with aggressive draw downs already, and they manage them quite well. It probably has to do with saylor's relationship with the other side of the trade and liquidity.

Humble Bitcoiner 1y ago

Yes but they weren’t this aggressive in 2022-2023

Orange Pilled Dictator 1y ago

Fair. I wonder if the terms are disclosed in the 10k.

🐢 1y ago

The liquidation risk is low because he has paid off all the debt he owed. All the new debt being issued are converts, meaning it is paid off in equity.

Once the converts mature, new shares are issued, so the risk isn’t one of liquidation, but rather dilution.

The only real risk is that the price of MSTR goes down, there isn’t a real risk that he becomes a forced seller of bitcoin, unless there is some operational cost that can’t be covered but the overhead is ridiculously low for the values he’s managing.

Basically all of the risk is on the individuals buying the converts as the coupon is 0 and the reward is equity.