Michael Saylor, president and CEO of MicroStrategy, speaks during the Bitcoin 2022 conference in Miami on April 7, 2022.
Eva Marie Uzcategui | Bloomberg | Getty Images
Every time Michael Saylor says the word bitcoin, MicroStrategy shares pop. She’s been doing a lot of talking lately.
The founder of MicroStrategy on Monday published on X that his company had just purchased another 12,000 bitcoins for nearly $822 million “using proceeds from convertible notes and excess liquidity.” This brings MicroStrategy’s total holdings to 205,000 bitcoin, now worth more than $15 billion, as the cryptocurrency continues to hit new highs.
Bitcoin rose 2.7% to above $73,400 on Wednesday.
MicroStrategy, a company that develops software but primarily acts as a proxy for bitcoin, rose 11% on Wednesday, following Tuesday’s 7.4% rally, which followed Monday’s 4.1% gain and Friday’s 9.7% jump. The stock is now up 68% since March 6, the day the company announced the pricing of a debt sale, and has skyrocketed 180% this year after rising 346% in 2023.
Saylor said Monday on CNBC’s “Squawk Box” that bitcoin will “eat gold.” And he said many more institutional investors will own the digital currency as it is added to ETFs. Additionally, Saylor is optimistic about next month’s halving process, which occurs every four years and slows the coin supply, reducing the amount of sales.
“The price of bitcoin will have to adjust to meet investor demand,” Saylor said. “This is what happens next for this asset class.”
MicroStrategy on Monday said it has completed an offering of 0.625% convertible notes due 2030, resulting in net proceeds of approximately $782 million. Analysts at Canaccord Genuity wrote in a note that day that they believe it is the first $800 million conversion due in 2030 marketed at a coupon rate of less than 1% with such a high conversion premium.
“While much of the company’s BTC accumulation late last year and early on was funded using equities,” the analysts wrote, “this time around the company instead leveraged its entire capital structure more by issuing a converted.”
MicroStrategy said in the release that it will “use the net proceeds from the sale of the bonds to acquire additional bitcoin.”
MicroStrategy has purchased nearly 16,000 bitcoins since the beginning of the year.
The value of its shares is appreciating at a much faster rate than the bitcoin it is purchasing. As of Monday, Canaccord analysis showed that the premium of MicroStrategy’s stock value over its bitcoin holdings was 86%.
This number has increased significantly in the last three days. Using Canaccord’s methodology, MicroStrategy’s stock value premium is now approximately 99%.
Founded in 1989, MicroStategy is in business software and cloud-based services, but its shareholder value is almost entirely tied to its ownership of bitcoin. The company announced its plan to invest in bitcoin in mid-2020, revealing in an earnings call that it would commit $250 million over the next 12 months to “one or more alternative assets,” which could include digital currencies like bitcoin.
At the time, MicroStrategy’s market capitalization was approximately $1.1 billion. Today the company is worth 30 billion dollars.
“Is there any company in the world that you wouldn’t want to invest in that could borrow $1 billion at less than 1% interest to invest in your best idea?” Saylor told CNBC. “This week gave our shareholders more bitcoin per share than we did a few weeks ago, so that’s very good for them.”
CLOCK: Microstrategy still has a huge runway ahead of it
