Convertible Bond Prices for Strategy Spike as Stock Nears All-Time High

Strategy’s Convertible Bonds Climb as Stock Rebounds Toward All-Time High

Shares of Strategy (MSTR) are rallying, and so are its convertible bonds. As the company’s stock recovers from recent lows and Bitcoin trades near its peak, the market value of Strategy’s convertible debt has surged—most of it now well above face value.

The firm, known for aggressively accumulating Bitcoin, has issued six convertible bonds totaling $8.2 billion. Five of those are now trading “in the money,” meaning the company’s current stock price has surpassed the bonds’ conversion prices. Only the 2029 bond, with a conversion price of $672.40, remains out of reach.

These bonds—offering a low average coupon of 0.421%—give holders the option to convert debt into equity if Strategy’s stock stays above certain levels. With MSTR shares recently climbing back to around $450 from a low of $235 just three months ago, investors are now valuing these bonds at roughly $13.4 billion—about $5.2 billion more than their original face value.

Despite the favorable market conditions, Strategy hasn’t issued new convertible bonds in recent weeks. Analysts suggest this could be due to waning speculative demand, as seen in the company’s options activity.

Implied volatility for MSTR has dropped sharply to 53.1%, far below earlier spikes above 200%, signaling reduced expectations for wild price swings. Meanwhile, open interest remains high at 2.4 million contracts, but trading volume has slowed to just 20% of its 30-day average. The put-call ratios (0.93 for open interest, 0.62 for volume) suggest a neutral outlook among traders.

This softening in derivatives activity may mean the ultra-low-cost convertible funding Strategy previously enjoyed could be harder to secure going forward. New debt would likely require higher coupons or more investor-friendly conversion terms—potentially leading to greater equity dilution.

Still, with Bitcoin holding near its highs and MSTR stock on the rise, Strategy’s existing convertibles continue to deliver strong gains for bondholders betting on the company’s long-term crypto thesis.