True North
@TNorth
True North is a team of investors and analysts exploring the outer edges of Bitcoin, digital credit, finance and macro economics.
Joined October 2024
33 Following 31.3K Followers
Water is ice at low temperatures. Liquid in the middle. Steam at high temperatures.
Convertible bonds work the same way.
Far below the conversion price they behave like pure debt.
As the stock price rises toward the conversion price they start behaving more like equity.
Hit the conversion price and they transform completely into equity.
Understanding which phase the converts are in tells you everything about the risk profile of the balance sheet.
$MSTR is actively melting the ice.
@GrainofSaltSF
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