Strategy reported a fourth-quarter loss on Thursday, as a turbulent period for digital assets caused the world's largest hoarder of bitcoin to record losses on its holdings.

Shares of the Michael Saylor-led company rose 24.66% in trading, extending heavy selling from earlier in the day. They are down nearly 30% this year.

As if the week for Strategy investors wasn’t already bad enough, their capital stack has hit another, new low. Unfortunately, 100% of the company’s convertible debt is now “out-of-the-money.”

With the firm’s 2030A convertible bond notes, the final holdout from last week, joining the other five series in reaching out-of-the-money territory, all six series now have a conversion price above the price of MSTR, Strategy’s common stock.

In plain English, it’s now worse for bondholders to convert into common stock rather than just keeping their bonds as bonds.

As a result, Strategy will need to continue servicing their coupons, and principal cash repayments.

While all bondholders are out-of-the-money, in other words, these convertibles will not convert into MSTR and will, instead, continue to drag on the cash obligations of the company going forward.

These creditors will demand on-time interest payouts and principal repayment through June 2032, unless the price of MSTR starts to rally and sufficiently motivate them to exercise their convertible options.

Strategy’s bonds pay interest coupons of 2.25%, 0.625%, and 0%, depending on their upcoming maturities. The company has $8.2 billion worth of notional debt outstanding.