Author: Willy Woo Source: X, @woonomic Translation: Shan Oppa, Golden Finance

The only significant liquidation risk: convertible bonds

1. If the holders of convertible bonds do not convert to stocks before the bond matures, MSTR will have to sell bitcoin to repay the bondholders.

2. The premise for this situation to occur is:

• MSTR's stock price has not increased by more than ~40% over 5-7 years (depending on the different bonds as detailed in the table below).

In other words, liquidation risk arises only if: the correlation between MSTR's stock price and bitcoin fails, or the price of bitcoin itself drops significantly.

Other risks (varying degrees)

Competition risk: If other companies imitate MSTR's strategy, it could dilute MSTR's premium (relative to net asset value, NAV).

SEC intervention risk: If the SEC intervenes in future bitcoin purchases, it could reduce MSTR's NAV premium.

Custody risk: MSTR's bitcoin assets are held by Fidelity and Coinbase, which poses certain custody security risks.

Risk of government nationalization: The government of the usa may take action to confiscate these bitcoin assets.

Key person risk: The irreplaceability of MSTR founder Michael Saylor may increase uncertainty for the company.

MSTR operational risk: Various potential issues exist within MSTR's daily operation.

Are there any other potential risks that might be overlooked?

Final remarks.

The convertible debt form is for reference only, with data sourced from Grok AI processing, and may contain slight errors, only showing a rough pattern. Details on MSTR's bitcoin custody arrangements have not yet been fully disclosed. For example, MSTR may use a multi-signature arrangement and retain co-signing rights. This is a wise way to manage custody assets.

MSTU/MSTX = Higher risk.

These are paper leverage bets based on MSTR, which almost immediately trigger liquidation levels (and there are no real bitcoin assets backing them). Derivative positions will dilute the value of bitcoin.

PS: Long-term holding of derivative positions does not achieve 2 times returns due to the influence of volatility effects (the cost of losses exceeds the returns).