Michael Saylor’s MicroStrategy is gobbling up every Bitcoin on the market.
The company announced Monday they had acquired an additional 51,780 Bitcoin for $4.6 billion, representing the largest single Bitcoin purchase ever.
This brings MicroStrategy’s total holdings to a whopping 331,200 Bitcoin or $30 billion.”The bulls are in charge,” said Markets.com analyst Neil Wilson in a note to clients. “One day Saylor might discover he is the market.”
“It’s a very simple strategy,” said MicroStrategy chairman and unequivocal Bitcoin bull, Michael Saylor, who claimed one day 8 billion people will see it in the same way. “Bitcoin is Manhattan in cyberspace, I just want to keep buying Manhattan in cyberspace.”
On the same day, the company also said it is raising an additional $1.75 billion – with a 0% interest bond – to purchase more Bitcoin.
Zero percent interest
MicroStrategy’s plan raised some eyebrows.
A 0% convertible bond is a type of bond that does not pay any interest, also known as a “zero-coupon bond”.
But there are reasons behind it – mostly in that the stock’s performance is yield-bearing enough.
“The MSTR 2027 convertible bond is up 170%,” wrote analyst James Van Straten. “This is why no bond buyer is asking for interest on the debt.”
Corporate interest heats up
MicroStrategy isn’t alone in its Bitcoin shopping spree.
Yesterday, Marathon Digital, one of the industry’s largest miners, announced $700 million to acquire more Bitcoin through debt-finance a la MicroStrategy. Semler Scientific, a medical technology company, also added 215 Bitcoin, partly funded by sales of the company’s stock.
And Japanese VC firm Metaplanet has also been selling more convertible notes to purchase Bitcoin. The company issued $11 million in debt to add more coins to its 1,015 Bitcoin stack.
“The corporate Bitcoin race is heating up,” said a former senior analyst for Bitcoin financial services firm Swan Bitcoin, Sam Callahan.
Corporate finance story of the decade
Other analysts are calling MicroStrategy the corporate finance story of the decade.
That’s because when Saylor announced its Bitcoin strategy in August 2020, the firm’s market capitalisation sat at $1.4 billion. That number has swelled to $73 billion now, a more than 5,500% increase.
MSTR, the company’s stock, has also gone vertical. It trades for $384, a 3,200% gain since Saylor began. Notably, that figure means the stock has outperformed every single stock in the S&P 500.
Saylor and MicroStrategy have flipped the corporate playbook on its head, said Bitcoin analyst Dylan LeClair.
“Dilution used to be the scariest thing, but shareholders now cheer every time new stock is issued,” he said in a Fox Business interview.
