Shares of Strategy (previously known as Microstrategy) MSTR rose on Tuesday after the company announced a $1.5 billion repurchase of convertible debt, a move investors viewed as a step toward strengthening its balance sheet amid continued volatility in Bitcoin prices.
The company, widely known as the world’s largest corporate holder of Bitcoin, completed the repurchase of its 0% convertible senior notes due in 2029 for approximately $1.38 billion, representing an 8% discount to par value.
The transaction reduced Strategy’s outstanding convertible debt obligations tied to the 2029 notes from $8.2 billion to $6.7 billion.
Shares of Strategy gained roughly 4.4% on Tuesday, although it lost most of the gains and was trading 0.89% up at the time of writing.
The stock lost gains after Bitcoin fell below $76,000.
The move comes as the company temporarily paused additional Bitcoin purchases following its recent $2.01 billion acquisition of 24,869 BTC between May 11 and May 17 at an average purchase price of $80,985 per coin.
Debt reduction eases investor concerns
Strategy’s aggressive strategy of issuing debt and equity to purchase Bitcoin has come under increasing scrutiny after cryptocurrency prices pulled back sharply from their 2025 highs.
Bitcoin has declined significantly from its peak above $126,000 reached last October, while Strategy shares have fallen roughly 56% over the past year.
The company also reported a $14.5 billion unrealized loss on its crypto holdings during the previous quarter.
Critics of the digital asset treasury model have raised concerns that companies heavily exposed to Bitcoin could face difficulty meeting debt obligations if cryptocurrency prices remain under pressure.
The debt repurchase appeared aimed at addressing some of those concerns by lowering future repayment obligations and reducing refinancing risk tied to the company’s convertible debt structure.
“The repurchase of the 2029 converts is both equity and credit positive for our investors and demonstrates our continued focus on liability management,” Chief Financial Officer Andrew Kang said in a statement.
“Strategy remains committed to maintaining a robust cash reserve to support the credit quality of our Digital Credit securities,” he added.
The company used existing cash reserves to complete the transaction and reported that it still holds approximately $871 million in cash.
Shift toward preferred stock financing
Alongside its convertible debt, Strategy also maintains four publicly traded preferred stock instruments used to help finance additional Bitcoin purchases.
Analysts said the company increasingly appears focused on funding future accumulation through preferred equity rather than relying heavily on convertible debt markets.
“Rather than relying on convertible debt instruments that introduce maturity walls and refinancing risk, Strategy is focused on funding bitcoin accumulation through perpetual preferreds that have no maturity date and can therefore function as permanent capital,” Benchmark Equity Research analyst Mark Palmer wrote in a research note Tuesday.
The company also disclosed approximately $15.5 billion in aggregate notional value tied to outstanding preferred stock instruments.
Industry participants broadly welcomed the debt reduction move.
“Great move by Strategy,” wrote Bitwise European head of research André Dragosch, who said the buyback removes a “major uncertainty around the cash repayment wall in mid-2028.”
Strategy currently holds 843,738 Bitcoin purchased at an average cost basis of roughly $75,700 per coin.
The company said it plans to gradually rebuild its cash reserves over time while continuing to manage its capital structure amid ongoing volatility in digital asset markets.
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