Strategy Eyes Bitcoin Sale to Fund $1.5B Convertible Note Buyback, MSTR Stock Dips

Michael Saylor’s Strategy, previously MicroStrategy, has announced plans for a major debt repurchase plan today in its latest filing. Notably, it seems that the buyback plan might involve selling part of its massive Bitcoin holdings, which has sparked discussions in the market.

Meanwhile, it seems that the announcement has fueled a negative sentiment among market participants. For context, the MSTR stock slipped more than 5% at the market open, shortly after the announcement from Michael Saylor-led Strategy.

Strategy Moves to Repurchase $1.5 Bln in Convertible Senior Notes

In a latest regulatory filing, Strategy said that it agreed to repurchase nearly $1.5 billion of its outstanding 0% Convertible Senior Notes due in 2029. The transactions were privately negotiated with select noteholders and are expected to close around May 19, pending standard conditions, the filing showed.

Notably, the Bitcoin treasury firm estimated the cash cost of the repurchase at roughly $1.38 billion. However, the final amount could change depending on the performance of MSTR stock during a pre-agreed measurement period.

In addition, the filing showed that the pricing calculation would partially depend on the stock’s daily volume-weighted average price. Meanwhile, Strategy also confirmed that it may use several funding sources for the deal.

These include existing cash reserves, proceeds from at-the-market stock sales, and potentially Bitcoin sales. That final option immediately caught investor attention because the company has built its corporate identity around accumulating Bitcoin rather than reducing exposure.

Meanwhile, this announcement followed Strategy’s latest purchase of $43 million in Bitcoin. In addition, the firm also recorded $206.61 million from the STRC stock issuance recently to fund more Bitcoin purchases.

Having said that, the latest hint of a potential Bitcoin sale has sparked discussions among traders. As a result, MSTR stock also recorded a significant dip.

MSTR Stock Dips 5% As Crypto Market Slips

Following the announcement from Strategy, MSTR stock recorded a plunge of over 5% and traded at $177.05 at the time of writing. In the prior session, the Strategy stock closed at $186.97.

The latest dip also followed a selloff recorded in the broader crypto market. At the time of writing, the global crypto market cap fell over 2.2% to $2.63 trillion, with BTC price recording a plunge of over 2% to $79,222.

Meanwhile, the possibility of Bitcoin sales marks a notable shift in market sentiment surrounding Strategy. The company has long positioned Bitcoin as its primary treasury reserve asset and consistently expanded its holdings during both bull and bear cycles.

Having said that, market watchers now worry that selling Bitcoin, even partially, could weaken the firm’s long-term crypto conviction narrative. However, the company did not confirm any immediate Bitcoin liquidation plans. Instead, it listed Bitcoin sales as one of several financing alternatives.