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0 sats \ 1 reply \ @Bell_curve 13 Jul \ parent \ on: How will $STRK change into $MSTR? bitcoin

ChatGPT contradicted itself...

Here are the exact conversion trigger terms for STRK from the official prospectus:

🔁 Conversion Rights (Holder-Initiated)🔁 Conversion Rights (Holder-Initiated)

Conversion Rate:
- Initially, every 1 STRK = 0.1000 MSTR shares, equating to a $1,000 per common share conversion price ([SEC][1], [SEC][2]).
Adjustments:
- Conversion rate adjusts for stock splits, dividends, distributions, or tender/exchange offers of MSTR ([StreetInsider.com][3]).
Timing:
- You may convert on any business day, subject to a minimum denomination ensuring at least 1 whole share of MSTR if converting, unless you convert all your STRK holdings ([StreetInsider.com][3]).
Settlement & Fractionals:
- MSTR shares are delivered by second business day post-conversion.
- Fractional shares are paid in cash (based on last sale price), or rounded up to a full share if they can legally and logistically be delivered ([StreetInsider.com][3]).

🏛️ Issuer-Initiated Remediation (Redemption & Repurchase)🏛️ Issuer-Initiated Remediation (Redemption & Repurchase)

Optional Redemption by Company:
- MSTR can redeem all STRK if the total liquidation preference of STRK falls below 25% of the initial offering amount ([Strategy][4]).
Tax-Event Redemption:
- Triggered if a specified tax event occurs. Redemption price is the higher of:
  1. $100 liquidation preference, or
  2. Average market price of STRK over 5 trading days prior,
    plus any accumulated unpaid dividends ([Stock Titan][5], [SEC][2], [Strategy][4]).
Fundamental-Change Repurchase Right:
- If a fundamental change occurs (e.g., acquisition), you have the right to require MSTR to repurchase STRK at liquidation preference + dividends ([Strategy][4]).

✅ So… is it automatic at $1,000?✅ So… is it automatic at $1,000?

No, there's no automatic/triggered conversion at $1,000.
Instead, it's a voluntary right (you choose when to convert) with terms set such that if MSTR reaches $1,000, it's financially sensible to convert.

🧭 Summary Table🧭 Summary Table

Feature	Details
Conversion initiated by	You (holder), on any business day
Rate	0.1 MSTR per STRK (initial)
Trigger to convert	Up to you; favorable when MSTR ≈ $1,000
Fractional shares	Cash settlement or rounded up
Adjustments	For stock events, rights, splits, dividends
Issuer redemption	Possible if < 25% outstanding, tax event, or fundamental change

🧠 What This Means for You:🧠 What This Means for You:

If MSTR hits $1,000, you'll likely choose to convert—but it won’t happen automatically.
You must actively submit a conversion instruction during business hours.
This gives you control and flexibility, but means staying alert if you want to seize the conversion.
Meanwhile, the company can force redemption in specific cases (e.g., tax or corporate change), but not at the $1,000 mark alone.

Would you like help understanding how to execute a voluntary conversion via your brokerage platform? Or would you prefer a side-by-side look at STRK versus directly owning MSTR? Just say the word!

[1]: https://www.sec.gov/Archives/edgar/data/1050446/000119312525017728/d835001dfwp.htm?utm_source=chatgpt.com "FWP - SEC.gov"

[2]: https://www.sec.gov/Archives/edgar/data/1050446/000119312525017726/d830622dex991.htm?utm_source=chatgpt.com "EX-99.1 - SEC.gov"

[3]: https://www.streetinsider.com/SEC%2BFilings/Form%2B424B5%2BMICROSTRATEGY%2BInc/24282864.html?utm_source=chatgpt.com "Form 424B5 MICROSTRATEGY Inc - StreetInsider"

[4]: https://www.strategy.com/press/microstrategy-announces-proposed-strk-preferred-stock-offering_01-27-2025?utm_source=chatgpt.com "MicroStrategy Announces Proposed STRK Preferred Stock Offering"

[5]: https://www.stocktitan.net/sec-filings/STRK/424b5-micro-strategy-incorporated-8-00-series-a-perpetual-strike-pref-0e24372ae8c9.html?utm_source=chatgpt.com "[424B5] MicroStrategy Incorporated 8.00% Series A Perpetual Strike ..."

0 sats \ 0 replies \ @Bell_curve 13 Jul

Perfectly summarized — and your instincts were right: the conversion is not automatic at $1,000/share for MSTR. You have to manually initiate it through your broker or custodian, and the $1,000 threshold is just a mathematically optimal point to consider converting based on the 0.1 ratio.

Here’s what this means in practice:

🛠️ What You Must Do to Convert STRK to MSTR🛠️ What You Must Do to Convert STRK to MSTR

Monitor MSTR’s price. Once it approaches or exceeds $1,000, it becomes attractive to convert.
Contact your brokerage (e.g., Fidelity, Schwab, etc.) and ask:
“How do I submit a voluntary conversion instruction for STRK Series A Preferred into MSTR common shares?”
Confirm minimum conversion units. You typically must convert in multiples of 10 STRK to get whole shares of MSTR.
Submit the request. This may involve a special form or instruction via the corporate actions desk.
Receive MSTR + cash-in-lieu (if any). Delivery is T+2 (two business days), and you'll receive cash for any fractional remainder unless it's rounded up.

💸 Tax Considerations💸 Tax Considerations

Not taxable upon conversion if it's a non-taxable recapitalization under IRS Section 368 (consult a CPA to confirm).
If taxable, the difference between your STRK basis and MSTR market value could trigger capital gains.
If STRK was bought on the open market, your cost basis and holding period may transfer to the MSTR shares.

👉 To avoid surprises, consider asking your tax advisor:

“Will my STRK-to-MSTR voluntary conversion be considered a taxable event under IRS rules?”

🧠 Quick Mental Checklist🧠 Quick Mental Checklist

Question	Answer
Is conversion automatic at $1,000?	❌ No, you must initiate it
Can I convert partial shares?	✅ Yes, but you'll get cash for fractional MSTR
Can MSTR force conversion?	❌ No, but they can redeem under other events
Does it affect taxes?	🤷 Possibly — depends on your situation

Would you like me to walk you through what to say or write to your brokerage’s corporate actions team, just in case they give you the runaround?