TechFlow news, on November 5, according to CoinDesk, cryptocurrency asset management firm CoinShares released a research report stating that MicroStrategy's ambitious plan to acquire $42 billion worth of Bitcoin over the next three years carries potential risks. The report emphasizes that the successful execution of MicroStrategy’s strategy depends on several factors:
- Favorable financing conditions must be maintained.
- Market demand for its convertible bonds must continue.
- Debt interest costs are rising, with issuance rates for zero-coupon convertible bonds already increased since 2021.
CoinShares analysts Alexander Schmitt and Satish Patel noted that MicroStrategy is closely tied to its Bitcoin holdings. If the company chooses to sell part of its Bitcoin, it could result in the disappearance of its valuation premium. Furthermore, any disposal may trigger significant tax events, and the company might even need to pay taxes on unrealized cryptocurrency gains in the future.
The report also mentioned that MicroStrategy’s Bitcoin operations may have already surpassed the scale of its software business, and cash flow from traditional operations may not cover future bond interest payments.
Despite these risks, MicroStrategy's stock price has remained favored by investors following the announcement of its large-scale funding plans. As of November 5, with Bitcoin approaching $70,000, MSTR shares rose approximately 8% in morning trading.
