S&P gives low rating to Michael Saylor's Strategy

Core Insights - S&P Global Ratings has assigned a 'B-' issuer credit rating to Michael Saylor's Bitcoin proxy Strategy, indicating a speculative grade with relatively high credit risk [5] - The company holds 640,808 BTC valued at approximately $74 billion, making it the world's leading Bitcoin treasury firm [2] - Despite being the first Bitcoin treasury company to receive a rating from a major credit agency, the rating is considered negative due to various weaknesses [3][4] Financial Position - Strategy's high concentration in Bitcoin, narrow business focus, weak risk-adjusted capitalization, and low U.S. dollar liquidity are identified as significant weaknesses [4] - The company has no debt maturities in the next 12 months and primarily finances its operations through equity [4] - Strategy has $8 billion in notional value of convertible debt, with $5 billion not meeting the conversion price and maturing starting in 2028 [7] Risks and Outlook - The rating outlook is stable, but there are liquidity risks associated with the company's convertible debt [5][6] - Potential regulatory changes regarding Bitcoin and cyber risks could adversely affect Strategy's business model [6] - S&P Global has indicated that it may lower the rating within the next 12 months if the company faces constrained access to capital markets or struggles to manage its convertible debt maturities [10]