MicroStrategy's Strategy to Navigate Potential Bitcoin Decline

MicroStrategy, now known as Strategy, has outlined its plan to withstand a potential drop in Bitcoin prices to $8,000. According to NS3.AI, the company intends to rely on its cash reserves and convertible notes to avoid the necessity of selling its Bitcoin holdings. Despite this strategy, MicroStrategy faces the risk of dilution as it raises capital through equity issuance to continue accumulating Bitcoin, particularly if its stock price remains below the conversion threshold of $183.19. A significant timeline for the company is September 2027, when holders of convertible notes may demand cash repayment if the stock prices do not recover. This scenario underscores the challenges of dilution and financing costs that MicroStrategy may encounter in the future.