MicroStrategy (MSTR) stock is soaring alongside Bitcoin. In the wake of extreme confidence, we fear many MicroStrategy investors fail to grasp the inherent risks with its unique convertible bond funding and leverage scheme. A recent podcast featuring Tom Lee presented some positive facts about MicroStrategy’s recent convertible bond offering but failed to tell the whole story. Left out of Tom Lee’s enthusiastic outlook is that the “novel strategy” can also bankrupt the company.
While Bitcoin may continue higher, proving MicroStrategy’s CEO Michael Saylor a genius, investors should at least appreciate what may happen if things do not go according to plan. We now present the other side of the story.
