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Michael Saylor Seeks ‘Smart Leverage’ to Enhance MicroStrategy’s Bitcoin-Focused Approach: Bloomberg
Michael Saylor, co-founder and chairman of MicroStrategy Inc., has detailed initiatives to improve “intelligent leverage” for the benefit of the company’s shareholders.
The Virginia-based organization, which has evolved from a software developer to a leveraged Bitcoin investment entity, continues to attract considerable attention for its audacious cryptocurrency strategy.
MicroStrategy’s Intelligent Leverage: What Does Michael Saylor Mean?
In a recent discussion with Bloomberg Television, Saylor elaborated on the company’s strategy for optimizing its capital framework.
He stated;
“We possess $7.2 billion in convertible bonds, with $4 billion effectively functioning as equity through the strike price and call price.”
“These convertibles are trading with a delta of nearly 100%, resembling equity. Our objective is to create more intelligent leverage to benefit our common stock shareholders.”
I encourage everyone to listen to this interview at least once. Ideally, at least three times.
By then, you will grasp what Michael Saylor and MicroStrategy are achieving through $BTC and why they are poised to make a significant impact.
No one is ready for what lies ahead.
YOU ARE NOT… https://t.co/3ojKtEEONl— Gladiator (@cf_trades) December 18, 2024
MicroStrategy has emerged as one of the most scrutinized corporate entities in the cryptocurrency sector.
This year, the company intensified its unconventional strategy, raising $42 billion exclusively to acquire and hold Bitcoin.
Consequently, its stock has surged by approximately 500%, significantly outpacing Bitcoin’s roughly 150% increase during the same timeframe.
In the last six weeks, the firm has disclosed multi-billion-dollar Bitcoin purchases every Monday, contributing to a rise in its share price alongside the cryptocurrency’s increasing value.
However, this bold strategy has also ignited discussions regarding its long-term viability and associated risks.
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MicroStrategy’s issuance of convertible bonds has been pivotal to its capital-raising initiatives. This year alone, the company issued $6.2 billion in convertibles, attracting interest from hedge funds utilizing convertible arbitrage strategies.
These funds acquire the bonds while shorting the company’s stock, effectively betting on its volatility.
The increased demand for its fixed-income instruments has enhanced MicroStrategy’s capacity to continue leveraging its position.
Despite uncertainties surrounding the sustainability of its strategy, MicroStrategy’s market capitalization has surged to over $90 billion.
This growth has led to the company’s inclusion in the Nasdaq 100 Index, a significant milestone anticipated to attract further institutional interest.
According to Bloomberg Intelligence, funds that track the tech benchmark index may acquire over $2 billion worth of MicroStrategy shares following its inclusion at the close of trading on Friday.
MicroStrategy’s Market Cap Nears $100 Billion Amid Bitcoin’s Unprecedented Rally
Bitcoin has risen 120% this year, recently exceeding $100,000, and has increased nearly 40% in the past month.
MicroStrategy has been a primary beneficiary. Since 2020, the company has purchased 386,700 BTC for $21.9 billion, now valued at approximately $37.6 billion.
In 2024 alone, MicroStrategy acquired 249,850 BTC, raising its total holdings to 439,000 BTC—surpassing Marathon Digital’s 40,435 BTC by 985%.
MicroStrategy’s market cap is approaching $100 billion, positioning it among major U.S. corporations if Bitcoin’s price continues to ascend.
Saylor recently discussed the company’s performance, highlighting a 46.4% yield quarter-to-date and a 72.4% year-to-date return. On December 9, the firm announced an additional acquisition of 21,550 BTC.
On December 1, Saylor presented Bitcoin to Microsoft’s board and urged the technology giant to adopt the cryptocurrency.
He suggested an annual $100 billion Bitcoin investment, arguing that it could contribute nearly $5 trillion to Microsoft’s market capitalization. However, the majority rejected the proposal during the last annual shareholder meeting.
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