Crypto: Strategy To Equitize Convertible Debt Over 3-6 Years: Saylor

The world’s largest DAT plans to convert $6 billion in bond debt to equity, claiming that it could survive an 88% Bitcoin crash.

Strategy founder Michael Saylor has revealed the firm plans to convert its $6 billion in bond debt into equity — a move that reduces debt on the balance sheet.

“Strategy can withstand a drawdown in BTC price to $8,000 and still have sufficient assets to fully cover our debt,” stated the firm on X on Sunday, prompting Saylor’s response.

The Bitcoin (BTC) treasury company currently holds $49 billion in Bitcoin reserves with a stash of 714,644 BTC.

Its convertible debt is around $6 billion, so BTC would need to fall around 88% for the two to be equal, and it still has enough to cover the debt, the firm explained.

Equitizing convertible debt means converting the bond debt into equity as stock shares rather than repaying it in cash, essentially turning bondholders into shareholders.

The move would reduce debt pressure on the company, but it can also dilute existing shareholders because new stock is issued.

The average Bitcoin purchase price for Strategy is around $76,000, which means the firm is currently down around 10% on its investment with the asset trading at $68,400.

Related: Michael Saylor signals another Bitcoin buy amid market rout

Meanwhile, Saylor signaled another Bitcoin buy as he posted the Strategy accumulation chart on X on Sunday, a typical sign of a purchase.

Source: CoinTelegraph