MSTR is currently in a precarious situation due to them issuing numerous bonds in order to buy BTC with the proceeds. These were convertible bonds with low/no coupon, and obviously what saylor was hoping for was that the stock (and BTC) would continue to pump, the bonds would be converted, and the debt is then gone. Obviously that strategy isn’t playing out too well. So let’s see where their balance sheet is now
(All numbers in millions and are approximate)
Total assets not including bitcoin: 743, of which 377 are “deferred tax assets” which I don’t think have any value if the company goes bust.
Total liabilities not including bitcoin related debt: 414
Revenue last 12 months: 507
Net Income last 12 months: 78
So the actual company really doesn’t have much going on here, these numbers are quite small.
Now, for the bitcoin related stuff:
Bonds/Loan related to bitcoin: 2405
Maturity of the bonds/loan:
They currently hold 129200 BTC, which at 18K is worth: 2325
From what I can find online, it says that MSTR bought 129200 BTC @ Avg of 30700 which would cost 3966. Part of this came from the bonds/loan noted above, they spent another 400 of cash they had on their balance sheet and issued around a billion $ worth of shares.
So at this time, if MSTR were to close out their entire BTC position, they would still be able to afford to pay off the debt. However, if BTC continues declining, MSTR could be insolvent as soon as 2025 when a significant chunk of their debt becomes due. Note that only 205MM of the debt is secured by BTC as collateral, the rest of the bonds is unsecured. I think this bankruptcy situation is fairly likely. BTC is basically the biggest asset bubble of all time. It had a market cap of 1 TRILLION at it’s peak, which basically means people think it’s worth as much as a company like AAPL, MSFT, or AMZN, for something that’s purely speculative and the only purpose it serves is you hope that someone will buy it off you later for even more money. The likelihood that this bubble continues popping and doesn’t come back is pretty high.