Issuance of 2 billion magnesium convertible bonds to acquire Bitcoin

Hours after issuing a "Profitability Warning," Strategy (formerly MicroStrategy) announced on Tuesday that it plans to issue $2 billion in zero coupon convertible senior notes. Strategy plans to use the proceeds from this issuance for general corporate purposes, including the purchase of Bitcoin.

These notes will mature on March 1, 2030, unless repurchased, redeemed, or converted in advance. According to the announcement, Strategy will settle the conversion in cash, Class A common stock, or a combination of both. Strategy We also plan to provide initial buyers with the option to purchase up to $300 million worth of notes, valid for five working days after issuance.

Continuously promote the 21/21 plan

Fundraising through convertible senior notes has always been one of Strategy's main tools for executing its 21/21 plan. The goal of this plan is to invest $42 billion in capital over the next three years to purchase more Bitcoin through methods such as splitting stocks and fixed income securities.

Since its announcement on October 30th, the company has completed over half of its $42 billion capital plan. Since then, nearly 200000 bitcoins have been purchased, bringing its total reserve to 478740, making it the world's largest corporate bitcoin holder.

Publish a 'Profit Warning'

Earlier on Tuesday, this Bitcoin finance company issued a profit warning in its 10-K filing submitted to the US Securities and Exchange Commission (SEC). Profit warning "is a warning statement issued by a listed company to investors through the stock exchange, warning that the company's profits will significantly decline compared to the previous period. Investors should act cautiously when buying and selling the company's stocks to avoid losses.

Strategy As of the fiscal year ending December 31, 2024, the company recorded a net loss, mainly due to an impairment loss of $1.79 billion on digital assets. The company warns that if there is a significant fair value loss in future Bitcoin holdings, it may not be possible to restore profitability. The sharp decline in the market value of Bitcoin may further weaken its ability to fulfill financial obligations.

Although Strategy's holdings of Bitcoin are generally profitable, due to accounting rules that treat Bitcoin held by businesses as intangible assets and require recording of past price decline losses, impairment losses may still appear on the books, thereby affecting profit reporting.