Analyst: Strategy's stock price fell more than 11% in early trading on Tuesday, but the possibility of forced liquidation is relatively low

According to a report by Decrpt, based on an analysis from The Kobeissi Letter, despite Strategy's stock price falling more than 11% in early trading on Tuesday due to market concerns about potential forced liquidation of Bitcoin, the likelihood of this scenario occurring is low due to structural safeguards.

Strategy primarily raises funds through convertible bonds, such as $2 billion zero-coupon bonds maturing in 2030 with an initial conversion price of $433.43 per share. This allows it to obtain capital without immediately diluting shareholder equity. As of now, Strategy holds approximately 499,096 BTC worth about $44 billion while its $8.2 billion debt heavily relies on Bitcoin performance.