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MicroStrategy’s stock price surged by 5.36 percent due to their recent public aim to acquire more bitcoin. However, Colin Wu, a Chinese altcoin journalist, cautions that the organization could face great pressure on convertible notes. He presented a graph that displayed the latest surge of MicroStrategy commodities and a dip of Tesla and Coinbase.
On the off chance that MicroStrategy increases their current BTC holdings, the organization may eventually become a bitcoin exchange trading firm, says the journalist. He further added that if MicroStrategy dips below a particular level, there could be massive pressure on its convertible notes.
BTC acquisition intention boosts MSTR stocks but causes a decline in TSLA
The graphic representation of stock price that Colin Wu shared illustrates that MicroStrategy has risen by 5.36%. On the other hand, Tesla, along with two large crypto organizations, Square and Coinbase, watch as their prices drop. Coinbase fell by 2.88 percent, and Square by Jack Dorsey dipped 1.39 percent. Tesla’s stock price dropped by 2.97 percent.
Michael Saylor, the CEO of MicroStrategy, recently proclaimed that his software giant company plans to sell off a billion dollars worth of stocks and spend some of the profits to purchase more BTC.
TSLA has been suffering a decline since it reached its peak towards the end of May, going at $630.8. A key factor that is causing the TESLA price to drop so much is the electric car company’s closing down of paying for electric cars in bitcoin. The share price of the company surged to $617.9 on June 14; however, from there on, it has plunged to $597.2.
Possible increase in pressure on MicroStrategy’s convertible bonds
At present, the firm possesses an astounding 92 thousand BTC, which equals around $3.6 billion when converted. Wu anticipates that if the firm purchases more bitcoin, it will become a bitcoin ETF, but Michael Saylor has already denied such claims. He clarified that BTC isn’t a type of security. Furthermore, the journalist thinks that if MicroStrategy falls beneath $397.99, then there would be increased stress on its convertible notes because of its yearly interest rate cost.
The cost percentage is about 6.125 every year, which amounts to 30.625 million. Once the MicroStrategy stocks fall in price, as in below $397.99, then there will be a great deal of stress on the convertible debts that it faces.