Strategy disclosed in a Form 8-K on Monday that it has agreed to repurchase approximately $1.5 billion of its zero-coupon convertible notes due 2029 for an estimated $1.38 billion in cash, buying back the debt below par. The transaction is expected to settle around May 19, after which the repurchased notes will be canceled, leaving roughly $1.5 billion of the 2029 tranche outstanding.
$1.5B Zero-Coupon Buyback: $1.38B in Cash at Discount
The notes were originally issued in November 2024 with a $3 billion notional size and a conversion price of $672.40 per MSTR share. With MSTR shares trading around $183, well below that threshold, bondholders have little conversion incentive and are selling back at a discount. Strategy will fund the repurchase through available cash, proceeds from its at-the-market equity program, and — for the first time explicitly listed — the sale of Bitcoin.
Bitcoin Sales Explicitly Listed as Funding Mechanism
At the Bitcoin 2026 conference, Michael Saylor stated: "Even if we were to sell one Bitcoin, we’d be buying 10 to 20 more Bitcoin." However, the latest filing now includes Bitcoin sales alongside cash reserves and equity proceeds as potential funding sources, marking a notable shift in tone. Strategy currently holds 818,869 BTC acquired at an average cost of approximately $75,537 per coin, representing a modest unrealized profit of about 5% at current prices (~$80,400). The total holding is valued at roughly $66 billion.
Saylor’s "Sell One, Buy 10-20" Pledge Tested
The buyback is part of Saylor’s multi-year plan to "equitize" the firm’s $8.2 billion debt stack. Strategy has been aggressively accumulating Bitcoin throughout 2026, adding 535 BTC as recently as May 10. JPMorgan analysts have projected total 2026 purchases could reach $30 billion. But the explicit inclusion of Bitcoin sales as a funding option suggests the company is building in flexibility for potential liquidity needs, potentially diluting Saylor’s "never sell" narrative.
Deep Discount Between MSTR Shares and Conversion Price
With the conversion price of $672.40 far above the current share price of ~$183 (~73% premium), the buyback at a discount reduces debt but also raises questions. If Bitcoin’s price continues to decline, Strategy may be forced to sell at lower levels to cover future debt maturities.
Market Reaction
Following the disclosure, MSTR shares fell roughly 2% in pre-market trading alongside Bitcoin’s pullback to around $80,400. According to Crypto.news, Strategy has generated 63,410 BTC in "Bitcoin Gain" so far in 2026, worth roughly $5.1 billion. Markets are watching for subsequent 8-K filings to see actual BTC sales figures.