Interested if anyone has a view on this. The below tweet thread suggests that the next tranche of MSTR convertible debt due to be repaid (which was going to be due in Dec 2025), may soon trigger a rule that allows debt holders to swap their debt for equity at the convertible rate -

According to the above thread, the key rates are conversion rate of $397.99, and a conversion premium of 30% above this - $517.39. If MSTR trades above this premium for 20 days out of 30, the debt holders can trigger the conversion and pocket the profit from swapping out their debt and buying equity at the conversion rate (and then selling at market price, if they want to).

Disclaimer - I'm a shareholder in MSTR - do not take this post as advice to buy or sell; but I have interest in what it means. The context is also that MSTR passed 517 in early December and has not looked back since then.

What it doesn't mean in isolation is that MSTR are necessarily about to buy more Bitcoin. They already bought Bitcoin with this debt! However one concern has always been whether they could roll over debt in debt markets which are infinitely more tricky to borrow in than in 2020/2021 when they borrowed most of their funds. If most convertible bond holders swap for equity this extinguishes the first tranche of debt due in 2025 and (I think) means the first major bit of debt due would instead be in 2027. Which gives yet more breathing room, since they also paid off the Silvergate loan some months back also.

It also means more equity has been issued instead - which is not necessarily bullish for the share price, especially if these debt holders want out and just sell for their profit. They were receiving next to no interest for their holding, either.

Let me know any thoughts - & have I read this all right?