TL;DR

• MicroStrategy (MSTR) just announced its latest plans to buy up another $700M in Bitcoin; this time through convertible notes.

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They’re back at it.

MicroStrategy (MSTR) just announced its latest plans to buy up another $700M in Bitcoin.

(Adding to the $14.3B worth of BTC they already hold).

How the heck does MSTR keep raising money?

Initially, it was through using cash that they had available on the balance sheet.

Then, as their balance sheet appreciated (with the rise of BTC’s value), they borrowed against the value of their holdings until they couldn’t borrow any more.

Now, they’re issuing convertible notes.

Meaning they’ll pay investors 2.25% annual interest, payable semi-annually on June 15 and December 15, beginning this December.

The notes will mature in June 2032, unless previously repurchased, redeemed, or converted.

To put it another way: the MSTR board is so confident that the value of BTC will rise by more than 2.25% per year, every year, that they will pay investors that fixed amount for the next 8 years - guaranteed.

Are they crazy for doing this? Sort of.

Is this going to work? Based on historical data, it’s looking good.

What happens if the value of BTC tanks and MSTR is forced to sell its BTC?

Now that MSTR owns ~1% of all BTC ever, fair to say, that would be bad.

So here’s hoping that doesn’t happen and the historical trend of ‘up and to the right’ continues for the next 8 or so years…

You’ve gotta love the gumption!