MicroStrategy shares continued their 2024 rally to a record high, rising in sympathy with Bitcoin prices and leaving the company at what appears to be a big premium to the value of its holdings of the cryptocurrency.

The run-up could make the stock vulnerable to a pullback, particularly if Bitcoin retreats. The stock has outpaced the currency this year, more than doubling in price while Bitcoin was up about 60%, Bloomberg data show.

A move by the company on Monday appeared to position it to take advantage of its elevated stock price. After the close of trading, MicroStrategy disclosed a proposed offering of $600 million of convertible debt due in 2030 through a private placement to qualified institutional buyers through Rule 144A. It plans to use the money to buy more Bitcoin and for general corporate purposes.

The convertible debt likely will be exchangeable for MicroStrategy at a premium to Monday’s closing price. Given that another hot stock, Super Micro Computer, recently issued convertible debt at a zero-percent rate, the MicroStrategy debt could carry an interest rate of 1% or less.

MicroStrategy, known as a Bitcoin play because the company has accumulated more of the coins than any other corporation, ended the Monday session up 24% at $1,334.01. It now has more than doubled so far this year, exceeding the record price reached in late 2021. Much of the gain has occurred in recent weeks.

The shares traded down in after-hours trading Monday on news of the convertible deal, falling 4.4% to $1,276. Convertible arbitragers may be shorting the stock ahead of the planned bond deal.

Bitcoin prices have rallied as well, with the digital currency gaining 8% to $67,935 Monday, according to Bloomberg. Bitcoin is near its 2021 peak of about $69,000.

As of Feb. 25, MicroStrategy held around 193,000 bitcoin according to a recent 8-K filing with the Securities and Exchange Commission. It purchased about 3,000 Bitcoin from Feb. 15 through Feb. 24, financed in part with an equity sale.

The point to note is that MicroStrategy’s market capitalization is far greater than the value of the Bitcoin it holds. Barron’s estimates that the Bitcoin holdings are worth about $13 billion at the current Bitcoin price, while the company also has a software business that Benchmark analyst Mark Palmer recently valued at nearly $800 million.

All that adds up to $13.8 billion. Subtracting Microstrategy’s roughly $2.2 billion of debt suggests that the company’s net value is about $11.6 billion, which is just over half of the company’s market value of more than $22 billion.