Strategy Raises $2B for Bitcoin—Is It Taking on Too Much Debt?

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Strategy is once again making waves with its aggressive Bitcoin strategy. The company plans to raise $2 billion through a private sale of convertible bonds, which are set to mature in 2030. These bonds won’t pay regular interest, but investors can choose to convert them into cash or Strategy’s Class A shares. With this move, Strategy aims to collect $1.9 billion, most of which will go toward buying more Bitcoin and funding general operations. Meanwhile, Strategy’s stock has surged 372% in the past year, ranking among the top performers in the US market.

Investor Raises Doubts Over Debt and Bitcoin Holdings

While Strategy’s plan seems bold, well-known angel investor Jason Calacanis isn’t convinced. He argues that the company should be valued lower than its Bitcoin holdings because of its rising debt. Another issue he highlights is that shareholders don’t actually control the company’s Bitcoin, which raises concerns about asset security. He also questions whether CEO michael saylor

michael saylor

Michael J. Saylor is an enthusiastic blockchain influencer and a splendid leader. He is an entrepreneur and business executive who co-founded Microstrategy, he is chairman and CEO of the same Microstrategy. He is a vocal advocate of Bitcoin. He is highly skilled in enterprise software and also has a rich knowledge of numerous fields, including analytics, data warehouses, leadership, SaaS, management, cloud computing, startups, professional services, enterprise architecture, mobile devices, and many more.
Location: United States
Education :
He graduated from MIT in 1987 with a double major in aeronautics, science, technology, and society.
Experience:

He has been an Executive Chairman & Founder at MicroStrategy from Aug 2022 – Present 
He was also Chairman, CEO & Founder of MicroStrategy from Oct 1989 to Aug 2022 

Skills: Buisness Intelligence and Data warehousing
Net Worth: Saylor’s net worth is about $4.6 billion, according to Forbes. He also held 2.4 million shares of MicroStrategy
Events Attended: Bitcoin 2024 Nashville and BTC prague
msaylor@microstrategy.com

EntrepreneurCrypto and Blockchain ExpertAuthor

is overpaying for Bitcoin, stating that every purchase Strategy makes means someone else believes their money is better spent elsewhere.

Could Strategy’s Stock Still Surge?

Despite his concerns, Calacanis isn’t betting against Strategy. He admits that the company’s stock could still climb in the short term. So far, the numbers back that up—Strategy’s stock rose 1.6% on Thursday and has soared 352% over the past year, far outperforming the S&P 500’s 23.5% gain. Despite a 30% decline from its November peak, it remains up over 700% in three years.

The $2 billion bond sale is just a part of a much bigger plan. The ultimate purpose of Strategy is to raise a whopping $21 billion over the next three years through various financial instruments, including stocks, bonds, and preferred shares. However, whether the bond sale will go through depends on market conditions. If things don’t go as planned, the company may have to rethink its strategy.

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Is Strategy Taking on Too Much Risk?

The company recently hosted a webinar to explain its plan to institutional investors, but questions remain. Can Strategy continue buying Bitcoin at this pace without running into liquidity issues? Will its debt become a problem in the long run?

Meanwhile, Calacanis continues to stir debate in the crypto world. He recently made headlines by calling XRP a “centralized” security, adding to his list of controversial takes. As Strategy moves forward, only time will tell whether its Bitcoin-heavy approach will pay off or become a costly gamble.