MicroStrategy's aggressive Bitcoin acquisition strategy has raised questions about its sustainability. The company plans to raise $42 billion over three years through equity sales and fixed-income securities, recently securing $4.6 billion from selling shares and $2.6 billion from convertible bonds to acquire 78,890 Bitcoin. MicroStrategy's approach includes issuing 0% interest convertible bonds, which tie investors' returns to the company's stock performance rather than traditional bond yields. This strategy poses risks; a drastic decline in Bitcoin's price could force MicroStrategy to liquidate assets at a loss. Furthermore, if the premium on MicroStrategy's stock falls significantly, bondholders might not convert their bonds to equity, exacerbating liquidity issues. While the company benefits from a long repayment period for its debt, its heavy reliance on Bitcoin's volatility raises concerns about its financial stability and the potential for a bubble. Investors might find simpler exposure to Bitcoin without the additional risk that MicroStrategy's leveraged position entails.

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