Strategy’s Latest Convertible Bond Spurs Talk of Crypto Fatigue

Strategy and its copycats have raised billions of dollars over the past four months, accounting for an ever-larger share of the broader US pool. MARA Holdings Inc. has tapped investors for nearly $2 billion while Riot Platforms Inc. and Bitdeer Technologies Group have also been active. That’s on top of Strategy’s nearly $9 billion haul.
The spike in activity means the crypto-tied market accounts for roughly 19% of US equity-linked issuance over the last 14 or so months, according to Bank of America Corp.
“That’s bigger than energy, basic materials, consumer staples — we’re getting to the point where this is a meaningful driver of performance and risk in the convertible space,” Michael Youngworth, the bank’s head of global convertibles and preferreds strategy, said in an interview.
The recent moves by Strategy, which until recently was called MicroStrategy Inc., to juice potential returns for buyers raised some eyebrows. Last week’s convertible note deal saw the conversion premium the firm had offered revised lower, and a three-year put option, while the preferred stock offering in January came with a hefty discount.