Odaily Planet Daily News MicroStrategy issues stocks or zero-coupon debt backed by a small amount of Bitcoin reserves to simply arbitrage and purchase a large amount of Bitcoin. The company announced in October that it plans to raise $42 billion over three years using these methods and is accelerating towards this goal. Bernstein analysts believe that 'MicroStrategy is playing a Bitcoin leverage game.' Analysts state that the longer debt maturities provide some buffer for the company in case of immediate repayment or Bitcoin price fluctuations. Moreover, even if MicroStrategy has to issue stocks to repay convertible bonds, the dilution effect on the company's equity from these stocks is limited. 'MicroStrategy increasingly relies on issuing stocks to purchase Bitcoin, but when it opts for convertible bonds, bond purchasers can obtain the option to convert them into company shares at a certain price, which is almost equivalent to a call option.' (foxaraby)

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