Rebel Capitalist News Is Strategy About To Go Bust?
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Dec 1, 2025 This discussion dives into the precarious position of MicroStrategy and Michael Saylor amid a significant Bitcoin selloff. The analysis covers the company's balance sheet, debt, and the challenges posed by convertible notes. Listeners learn why recent financing options might not save MicroStrategy from potential negative equity. The implications for Bitcoin without Saylor's investment are also explored, emphasizing the broader impact on the cryptocurrency market. Ultimately, while short-term survival seems likely, long-term risks loom large.
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Shareholder Pain From Prolonged Volatility
- MicroStrategy's share price has fallen heavily and many recent buyers are likely holding large paper losses.
- George Gammon warns sustained volatility may force shareholders to 'pull the ripcord' and sell.
Debt Vs Bitcoin Threshold
- MicroStrategy holds vast Bitcoin reserves and has $8.2 billion in debt, so bankruptcy is unlikely unless BTC collapses to very low levels.
- George estimates Bitcoin would need to drop to roughly $12,000 before debt would exceed equity.
Convertible Note Holders Are Under Water
- Convertible notes issued to MicroStrategy investors often have conversion strikes far above today's price, leaving lenders 'underwater'.
- Most noteholders would prefer debt repayment over converting to equity at current prices.