MicroStrategy (MSTR), under the leadership of its chairman and well-known Bitcoin advocate Michael Saylor, has continued to expand its Bitcoin (BTC-USD) treasury with a strategic approach that includes leveraging both equity and debt markets. Recently, the company completed a $3 billion convertible bond sale, which was upsized from $2.6 billion due to significant investor interest. This move is part of a broader initiative known as the “21/21” program, aiming to raise $21 billion each in equity and debt by 2027 to fund Bitcoin acquisitions.
With Bitcoin’s price approaching $100,000, MicroStrategy’s recent financial moves could position the company to acquire over 30,000 additional Bitcoins. Barron’s reports that speculation is already building that MicroStrategy may announce new purchases soon, with a filing or press release potentially expected in the coming days.
The rationale for this move lies in the exceptionally favorable terms of the recent bond sale. With an interest rate set at zero—matching the year’s lowest for convertible debt—and a 55% conversion premium, among the highest in 2024, the structure is highly appealing to investors. Moreover, it aligns with Saylor’s strategy of positioning these securities as “Bitcoin bonds,” offering downside protection while providing upside exposure to Bitcoin’s price movements.
The company’s aggressive Bitcoin accumulation strategy has been supported by its ability to sell equity at-the-market through partnerships with nine Wall Street firms, raising about $6.6 billion in November alone for Bitcoin purchases. This has resulted in MicroStrategy holding 331,200 Bitcoins as of November 17, establishing it as the largest corporate holder of the cryptocurrency.
MicroStrategy’s market capitalization has soared to approximately $95 billion, reflecting a significant premium over the intrinsic value of its Bitcoin holdings, which are valued at around $32 billion. This premium has grown from about 20% at the start of 2024, showcasing investor confidence in the company’s Bitcoin strategy over its traditional software business.
The success of these financial strategies has been underscored by the performance of MicroStrategy’s stock, which at press time saw a 3.8% increase to $437.90 in premarket trading on Monday. The name is up ‘only’ 568% year-to-date and 752% year-over-year. This performance indicates that the market views MicroStrategy’s approach favorably, seeing it as a direct play on Bitcoin’s potential for appreciation.
Given these developments, the crypto community and investors alike are watching closely for any forthcoming announcements from MicroStrategy regarding new Bitcoin acquisitions. Such disclosures could come in the next few days, further cementing the company’s role in the cryptocurrency space and potentially influencing Bitcoin’s market dynamics.
Reference: Barron’s
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