Microstrategy's convertible bonds face liquidity pressure

2026-02-22 11:07:09

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The $8.2 billion convertible bonds issued by MicroStrategy remain out of the money, posing new challenges to the company’s liquidity-driven operational environment. Creditors are choosing not to rush conversions and are maintaining their bond holdings, which is placing significant strain on the company’s financial health.

Conditions for Convertible Bond Conversion Not Yet Met

According to NS3.AI analysis, the company’s stock price (MSTR) has not yet reached the level that would trigger conversion. As a result, creditors prefer to hold onto their bonds rather than convert to common stock. Under these circumstances, MicroStrategy must continue to pay cash interest and prepare for principal repayment until the bonds mature.

Interest Burden Under a Liquidity-Driven Operating Environment

Unless the stock price rises, these convertible bonds will remain a continuous financial burden on the company, potentially worsening its liquidity situation. With regular interest payments and principal repayment obligations, the company’s cash flow management will become increasingly challenging. Even in a volatile market environment, this structural debt burden can exert significant pressure on the company’s management.

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