According to ChainCatcher, MicroStrategy co-founder and chairman Michael Saylor stated that once the current fundraising plan is exhausted, the company will shift from a leveraged Bitcoin proxy plan to a more focused approach on fixed-income securities to raise funds for purchasing cryptocurrency.
When asked how he expects to fund future cryptocurrency purchases, Saylor expressed this preference in an interview. So far, MicroStrategy has used a combination of new stock and convertible bond sales to fund its purchases, the latter of which has returned profits to shareholders as its stock has risen to a price that can be converted into shares.
Saylor said, 'We have $7.2 billion in convertible bonds, but $4 billion of that is essentially equity; they trade through exercise prices and call prices, their delta is about 100%, they look like equity, and we want to go back and build smarter leverage to benefit our common shareholders.'
He stated that the company uses regulated exchanges like Coinbase to purchase Bitcoin. MicroStrategy's stock price has risen about 500% this year, far outpacing Bitcoin's approximately 150% increase.
Hedge funds have been looking for their fixed-income securities to implement convertible arbitrage strategies, buying bonds and shorting stocks, essentially betting on the volatility of the underlying stock. This demand has driven MicroStrategy to issue $6.2 billion worth of convertible bonds this year.
