MicroStrategy is planning ANOTHER $600 million convertible debt sale to buy BTC

[thecodebear]

Michael Saylor announced his company Microstrategy is planning to sell another $600 million in convertible debt to buy more Bitcoin. Remember they did $650 million of this back in December. I don't know the company's financials, and I don't know exactly how convertible debt means - I just know its debt that people buy that can be converted into stock and/or cash at a later date - but I feel like they are going out on a limb here.

I mean I don't think it's a terrible amount of risk because Bitcoin is unlikely to be below current prices very much in the future, it may not even fall this low during a bear market, but it feels like he is like "sell my house to buy bitcoin" level of FOMO now haha. I mean it'll probably work out and just make his company a vast amount of money, but debt financing another round of Bitcoin buying just seems bizarre. I mean I'm all for it cuz that'll boost my wealth haha, and I doubt it'll hurt the company, but instead of just putting all their cash reserves in bitcoin they are putting a weren't content with financing a huge bitcoin purchase with debt just once but are now doing it again...Just seems irresponsible in general for a company to do that.

I do love how he's basically throwing down the gauntlet to all other companies though, being like "hey I put all my company's cash in bitcoin and that wasn't enough so I'm buying $1.25 BILLION in debt financed bitcoin (which I think is about the the company's entire market cap before they announced their initial bitcoin buy  ), when you gonna join the party rest of corporate America?!"


Thoughts??

[suchmoon]

Thoughts??

If this fails, which it almost inevitably should because Mike Saylor seems to be a crook of some sort, it will be a good news/bad news type of thing for Bitcoin:

• Good news for the anti-bank-establishment bitcoiners - rotten debt-fueled fiat-based over-leveraged Enron-wannabe gets fucked by attempting to bring these depraved practices to crypto.
• Bad news - well, bad publicity.

[The Sceptical Chymist]

I mean I don't think it's a terrible amount of risk because Bitcoin is unlikely to be below current prices very much in the future, it may not even fall this low during a bear market,

Yeah, that's what everyone thinks when the bull market is running rampant.  Nobody can see any end in sight to the euphoria--until it just finally ends with a bang.  I'm hoping we're not near any kind of top, but with bitcoin you just never know.  There are no doubt a lot of traders who've made some serious profits, so there's bound to be some selling as they take their profits off the table.  If they're doing that now it doesn't seem to be affecting the market much, but we'll see.

but it feels like he is like "sell my house to buy bitcoin" level of FOMO now haha.

Lol, I agree 100%.  Or like people who take out cash advances on their credit cards to buy bitcoin, buy using crazy leverage, etc.  I'm curious as to what MSTR's stockholders think about all of this.  The stock has been doing great, but so has the entire market--but I haven't heard of any shareholder revolt because of all of their bitcoin buying as of yet.  Dude better hope bitcoin doesn't start sinking, or else he might find himself out of a job.

[mk4]

Dude's gone bonkers! In 5-10 years, Saylor's going to be either the biggest unexpected genius of the tech industry, or a total laughing stock. Also taking note that he's pretty much buying the short-term top here. If bitcoin's price trajectory totally disconnects with the S2F[1] model soon and decided to go on a full-on nosedive bear market prematurely, there's going to be A LOT of selling of $MSTR shares.

[1] https://digitalik.net/btc/

[MyCryptoDomains]

instead of buying his bonds you can buy btc or some btc product of you're a boomer

and maybe i'm missing something, but if he wanted to have a ton of btc he should've just stfu and not talk up the the coin all over the internet until he had enough. i mean, you host a conference telling everyone to buy, and then you borrow to buy @ 50K...

[notblox1]

Saylor did a great job with bringing Elon Musk to invest in Bitcoin, and with this new move it looks a lot like gambling to me with his new plan to buy more Bitcoins, and maybe he is more aiming to influence other big tech guys to invest their own money.
I was reading report from Skew that is showing around 14% probability that Bitcoin is hitting $100k by the end of year 2021, and maybe that doesn't look like great percentage, but it is growing every year if we look at S2F model.
He who dares, wins

[600watt]

If this fails, which it almost inevitably should because Mike Saylor seems to be a crook of some sort, it will be a good news/bad news type of thing for Bitcoin:
(...)

he seems to be a crook? the guy that single handedly doubled the price of bitcoin? and got elon going? and hosts conferences to get corporate treasuries in to btc? and provides free btc education?

[suchmoon]

he seems to be a crook? the guy that single handedly doubled the price of bitcoin? and got elon going? and hosts conferences to get corporate treasuries in to btc? and provides free btc education?

I know it's tempting to idolize Bitcoin evangelists (anyone remember Roger "Jesus" Ver?) but Saylor has a history of financial fraud and his business hasn't been doing well until he decided to pump Bitcoin. So yeah to me he seems like a corporate crook who decided to blow OPM on something that I happen to have an interest in but that doesn't mean I should start praising him for that. I'll be happy to eat my words if 10 years from now he truly turns out to be the second coming of Satoshi.

[bbc.reporter]

Thoughts??

If this fails, which it almost inevitably should because Mike Saylor seems to be a crook of some sort, it will be a good news/bad news type of thing for Bitcoin:

• Good news for the anti-bank-establishment bitcoiners - rotten debt-fueled fiat-based over-leveraged Enron-wannabe gets fucked by attempting to bring these depraved practices to crypto.
• Bad news - well, bad publicity.

This gamble might end in Michael Saylor’s Microstrategy to become as big as Google or this might begin the end for a certain type of investing. Ark Invest, Tesla and other institutional investors are also in a similar class, I reckon.

[LUCKMCFLY]

From the point of view of a market speculator, I would see it as they already affirmed, if it is good news, I would be careful, because people always look to buy when the big ones buy, and when they see the good news, but when there is bad news, the  weak hands sell , while the great buy taking advantage of the panic. And although many of the big ones have already bought massively like Paypal, and it is speculated that Apple will also do so, this would represent an exponential increase in the price of Bitcoin.

[ivankoh]

This is good news. This will be determined soon, and if in my judgment, perhaps among the large institutional investors made moves one step ahead when Strategy's $ 600 million was embedded. Meaning naturally there will be hold and continue to buy from large investors. Bitcoin's value will continue to gain momentum when it comes to strong support. Then, we will see the next historic peak.

This gamble might end in Michael Saylor’s Microstrategy to become as big as Google or this might begin the end for a certain type of investing. Ark Invest, Tesla and other institutional investors are also in a similar class, I reckon.

The trend of the market has been changed between feasibility and practicality and that creates the authority and influence for large organizations to enter the market.

[600watt]

he seems to be a crook? the guy that single handedly doubled the price of bitcoin? and got elon going? and hosts conferences to get corporate treasuries in to btc? and provides free btc education?

I know it's tempting to idolize Bitcoin evangelists (anyone remember Roger "Jesus" Ver?) but Saylor has a history of financial fraud and his business hasn't been doing well until he decided to pump Bitcoin. So yeah to me he seems like a corporate crook who decided to blow OPM on something that I happen to have an interest in but that doesn't mean I should start praising him for that. I'll be happy to eat my words if 10 years from now he truly turns out to be the second coming of Satoshi.

having earned 500mil usd with a business not doing well? they made 30-50 mil profit per year. idolizing may not be a good idea, but he is contributing a lot towards bitcoin. to acknowledge that is not that hard. but hey, publicly accusing he is a CROOK!!1! because ver is such a prick is the way to go. the way saylor is analyzing bitcoin shows others the way. ver is a selfish idiot, never had the intellectual capacity.

[suchmoon]

having earned 500mil usd with a business not doing well? they made 30-50 mil profit per year.

Not even close. MSTR net income for 2017-2020: $18m, $22m, $34m (ok, that one is technically in the 30-50 range), -$7m (loss). Most growth metrics were in the red for the last 5 years, perhaps longer. Borrowing to buy Bitcoin doesn't make it look any better either. It's a gamble with shareholders' equity and banks' money, really not something I would cheer on.

[600watt]

having earned 500mil usd with a business not doing well? they made 30-50 mil profit per year.

Not even close. MSTR net income for 2017-2020: $18m, $22m, $34m (ok, that one is technically in the 30-50 range), -$7m (loss). Most growth metrics were in the red for the last 5 years, perhaps longer. Borrowing to buy Bitcoin doesn't make it look any better either. It's a gamble with shareholders' equity and banks' money, really not something I would cheer on.

rather brillant move. dollar is cheap. bitcoin the first asset that reached digital scarcity. 

[thecodebear]

I just saw that they've upped the amount 50%, from $600 million to $900 million!! Saylor wants his company to be the #1 Bitcoin investor haha!

But I also just saw that these convertible notes they are selling can't be converted for 6 years - until Feb 15, 2027. So in light of that this debt raise to buy bitcoin is a lot safer. It'd be one thing if buyers could convert in like 6 months or a year or something, but in all likelihood BTC will be like 10x the current price by the time anyone can convert these notes. Get ready for another $900 million in BTC to be taken out of circulation!!

[el kaka22]

having earned 500mil usd with a business not doing well? they made 30-50 mil profit per year. idolizing may not be a good idea, but he is contributing a lot towards bitcoin. to acknowledge that is not that hard. but hey, publicly accusing he is a CROOK!!1! because ver is such a prick is the way to go. the way saylor is analyzing bitcoin shows others the way. ver is a selfish idiot, never had the intellectual capacity.

I do agree that idolizing any crypto evangalist is a bad idea, I do not really like anyone aside from maybe winklevoss twins but not idolizing them neither just find them quite successful and not at all weird crooks like facebook wanted to show, at the end of the day you should not idolize anyone in anything, because believe me if you get the chance, you could become at least as good as them when you give enough effort, nobody reaches to a point by doing something no other human could possibly do (except physically handicapped).

Michael Saylor is an "alright" investor and he keeps doing what he believes would make him a good amount of profit, he got into bitcoin and made a good amount of profit from there, and he thinks he could make a lot more as well if he keeps this up, that is about it and there is really no secret or anything behind it.

[Ulven]

I just saw that they've upped the amount 50%, from $600 million to $900 million!! Saylor wants his company to be the #1 Bitcoin investor haha!

But I also just saw that these convertible notes they are selling can't be converted for 6 years - until Feb 15, 2027. So in light of that this debt raise to buy bitcoin is a lot safer. It'd be one thing if buyers could convert in like 6 months or a year or something, but in all likelihood BTC will be like 10x the current price by the time anyone can convert these notes. Get ready for another $900 million in BTC to be taken out of circulation!!

Yes, I just read their post: https://www.microstrategy.com/en/investor-relations/press/microstrategy-announces-pricing-of-offering-of-convertible-senior-notes_02-17-2021

It's a good idea to read this news because it adds a lot of happiness to cryptocurrency investors!!It seems the market will continue its upward path to new highs this year. It will be better to keep the coins for good profits

[franky1]

convertible debt note.. is in translation:
"if X goes bankrupt your not getting a penny"

looking at his history. he certainly is going to call it quits before the 6 years are up and disappear with the profit. while claiming the company is insolvent.

[adaseb]

How do we know what price he will buy the $900 million worth at? I am just assuming that he and other funds/ institutions and companies that want Bitcoin on their balance sheet will most likely buy when it dips.

Buying right now seems very risky. Hence many institutions might not invest yet. However we had a 30% dip back in January so there is a good chance we might get another 30% dip and maybe he will buy in at that time.

I am assuming most companies would be comfortable buying in the $30-40k region.

[wheelz1200]

Michael Saylor announced his company Microstrategy is planning to sell another $600 million in convertible debt to buy more Bitcoin. Remember they did $650 million of this back in December. I don't know the company's financials, and I don't know exactly how convertible debt means - I just know its debt that people buy that can be converted into stock and/or cash at a later date - but I feel like they are going out on a limb here.

I mean I don't think it's a terrible amount of risk because Bitcoin is unlikely to be below current prices very much in the future, it may not even fall this low during a bear market, but it feels like he is like "sell my house to buy bitcoin" level of FOMO now haha. I mean it'll probably work out and just make his company a vast amount of money, but debt financing another round of Bitcoin buying just seems bizarre. I mean I'm all for it cuz that'll boost my wealth haha, and I doubt it'll hurt the company, but instead of just putting all their cash reserves in bitcoin they are putting a weren't content with financing a huge bitcoin purchase with debt just once but are now doing it again...Just seems irresponsible in general for a company to do that.

I do love how he's basically throwing down the gauntlet to all other companies though, being like "hey I put all my company's cash in bitcoin and that wasn't enough so I'm buying $1.25 BILLION in debt financed bitcoin (which I think is about the the company's entire market cap before they announced their initial bitcoin buy  ), when you gonna join the party rest of corporate America?!"


Thoughts??

These massive movements are huge for bitcoin price.  Not only does it indicate big buys/companies are coming in for orange coin but it provides assurance to retail investors to step into the game.  I think the fun has just begun, bigger fireworks are on the horizon

[GreatArkansas]

How do we know what price he will buy the $900 million worth at? I am just assuming that he and other funds/ institutions and companies that want Bitcoin on their balance sheet will most likely buy when it dips.
(.....)

I think this will be disclosed after few days they already bought Bitcoins. They will not announce for sure before their buying, since it is also the same as what happened on their past purchases. And also, just like what Tesla did recently, which is probably around $30,000 - $34,000 price average of their purchases and they announced it after few days of their purchase, and viola, easy pump, easy profits 

[thecodebear]

How do we know what price he will buy the $900 million worth at? I am just assuming that he and other funds/ institutions and companies that want Bitcoin on their balance sheet will most likely buy when it dips.

Buying right now seems very risky. Hence many institutions might not invest yet. However we had a 30% dip back in January so there is a good chance we might get another 30% dip and maybe he will buy in at that time.

I am assuming most companies would be comfortable buying in the $30-40k region.

I don't see why you think there is a lot of risk right now. Bitcoin literally JUST came out of a correction. It'd be totally unprecedented if there was another major correction any time soon. In december they pretty much bought right after they raised the money. From their website I believe they are selling the notes on the 19th. So I'd expect they will have made all their purchases by end of the month. They aren't playing a betting game trying to guess the price and hoping there will be a dip and buy, they will just be buying once they have the money, and those buys will likely execute over the course of a few days.

Also the assumption that most companies would buy on a dip is not a good assumption. These companies are new investors to bitcoin and they get scared off when they see a dip just like everyone else new to bitcoin. Remember how we just had a correction and institutional buying dried up after about a week into the correction because there was suddenly loads of FUD that the bull run was over and price was going straight back to $20k. Institutional investment is starting to pick up again a bit now (judging by grayscale buys) that the correction is over and price is moving to a new level. Next major correction will probably drop the price back into the $40,000s, and I bet institutional buying will dry up for a bit then as well as everyone gets all scared.

[adaseb]

How do we know what price he will buy the $900 million worth at? I am just assuming that he and other funds/ institutions and companies that want Bitcoin on their balance sheet will most likely buy when it dips.

Buying right now seems very risky. Hence many institutions might not invest yet. However we had a 30% dip back in January so there is a good chance we might get another 30% dip and maybe he will buy in at that time.

I am assuming most companies would be comfortable buying in the $30-40k region.

I don't see why you think there is a lot of risk right now. Bitcoin literally JUST came out of a correction. It'd be totally unprecedented if there was another major correction any time soon. In december they pretty much bought right after they raised the money. From their website I believe they are selling the notes on the 19th. So I'd expect they will have made all their purchases by end of the month. They aren't playing a betting game trying to guess the price and hoping there will be a dip and buy, they will just be buying once they have the money, and those buys will likely execute over the course of a few days.

Also the assumption that most companies would buy on a dip is not a good assumption. These companies are new investors to bitcoin and they get scared off when they see a dip just like everyone else new to bitcoin. Remember how we just had a correction and institutional buying dried up after about a week into the correction because there was suddenly loads of FUD that the bull run was over and price was going straight back to $20k. Institutional investment is starting to pick up again a bit now (judging by grayscale buys) that the correction is over and price is moving to a new level. Next major correction will probably drop the price back into the $40,000s, and I bet institutional buying will dry up for a bit then as well as everyone gets all scared.

I don't think hedge funds and companies with billions to invest in BTC will get scared when there is a dip. They are professionals and do this type of trading everyday. Most retail people are the complete opposite. They buy when price goes up because they get FOMO. However when we get a small pullback they get scared to buy. Or because they think it might go a little lower and it never does. I don't think hedge funds think like that.

Most likely they use old-school TA and can easily see that $40-42K would be the first area to buy some BTC and if it goes lower than add more at $35K area. I don't think they would get scared buying BTC at $42k which is essentially support on the daily chart. Most likely there are tons of people waiting for $42K so they can buy.

[Wind_FURY]

convertible debt note.. is in translation:
"if X goes bankrupt your not getting a penny"

looking at his history. he certainly is going to call it quits before the 6 years are up and disappear with the profit. while claiming the company is insolvent.

Wrong again, from franky1.

If “X” goes bankrupt, the company will file for Chapter 11. Creditors, and shareholders will work with a commitee appointed by the government to either re-organize the company. OR probably distribute the “assets”in their treasury?

Plus “X” has become more valuable by HODLing Bitcoin, than NOT HODLing Bitcoin. It will not be bankrupt.

[LUCKMCFLY]

This is news that undoubtedly if it occurs, will generate an incredible pump in the price of Bitcoin, although the market does not usually react immediately to news except for a fundamental, I believe that the good news strategy is working, because It is stirring the emotions of many and they have started buying at new highs.

This is normal, it is valid in the market, now, if Microstrategy buys, and then announces it, there will be many more reactions worldwide, the price is rising, many speculators entering the market not to miss the movement, and the correction of the new ATH has not been given. I think that for now the best strategy is Hodl, be it for market speculators and investors.

[RealMalatesta]

I don't think hedge funds and companies with billions to invest in BTC will get scared when there is a dip. They are professionals and do this type of trading everyday. Most retail people are the complete opposite. They buy when price goes up because they get FOMO. However when we get a small pullback they get scared to buy. Or because they think it might go a little lower and it never does. I don't think hedge funds think like that.

Most likely they use old-school TA and can easily see that $40-42K would be the first area to buy some BTC and if it goes lower than add more at $35K area. I don't think they would get scared buying BTC at $42k which is essentially support on the daily chart. Most likely there are tons of people waiting for $42K so they can buy.

I have to say they are definitely a lot better at holding and waiting out the storm but let's not act like they are so great at what they do neither. Remember these are the same companies needed saving twice in nearly one decade now, so it is really not like they are so awesome at this than any of us. They could be just holding better than many investors but they are still beholden to investors of their own and when the price drops a lot and investors call out for cashing crypto, they may fail about that too.

Or they could simple sell when it is going up and fail to make the most profit they could only because they want to show better end of quarter reports. This is why I think it is quite obvious that these huge companies going into bitcoin doesn't mean much, sure it is a good thing but it is not like it is going to change anything major for anyone, they might still make big mistakes.

[fillippone]

Apparently the sale has ended:

Apparently, they completed the sale of their convertible bond:


https://twitter.com/michael_saylor/status/1362785854758993927?s=20

Please note that they allocated 14 days to perform the sale, but only one day was enough.

This could explain the price action, either or they already bought 1.05 Billion, or they are going to buy this soon!

In the linked thread I posted a few mumblings on this bond sales, for example here and here.

[thecodebear]

How do we know what price he will buy the $900 million worth at? I am just assuming that he and other funds/ institutions and companies that want Bitcoin on their balance sheet will most likely buy when it dips.

Buying right now seems very risky. Hence many institutions might not invest yet. However we had a 30% dip back in January so there is a good chance we might get another 30% dip and maybe he will buy in at that time.

I am assuming most companies would be comfortable buying in the $30-40k region.

I don't see why you think there is a lot of risk right now. Bitcoin literally JUST came out of a correction. It'd be totally unprecedented if there was another major correction any time soon. In december they pretty much bought right after they raised the money. From their website I believe they are selling the notes on the 19th. So I'd expect they will have made all their purchases by end of the month. They aren't playing a betting game trying to guess the price and hoping there will be a dip and buy, they will just be buying once they have the money, and those buys will likely execute over the course of a few days.

Also the assumption that most companies would buy on a dip is not a good assumption. These companies are new investors to bitcoin and they get scared off when they see a dip just like everyone else new to bitcoin. Remember how we just had a correction and institutional buying dried up after about a week into the correction because there was suddenly loads of FUD that the bull run was over and price was going straight back to $20k. Institutional investment is starting to pick up again a bit now (judging by grayscale buys) that the correction is over and price is moving to a new level. Next major correction will probably drop the price back into the $40,000s, and I bet institutional buying will dry up for a bit then as well as everyone gets all scared.

I don't think hedge funds and companies with billions to invest in BTC will get scared when there is a dip. They are professionals and do this type of trading everyday. Most retail people are the complete opposite. They buy when price goes up because they get FOMO. However when we get a small pullback they get scared to buy. Or because they think it might go a little lower and it never does. I don't think hedge funds think like that.

Most likely they use old-school TA and can easily see that $40-42K would be the first area to buy some BTC and if it goes lower than add more at $35K area. I don't think they would get scared buying BTC at $42k which is essentially support on the daily chart. Most likely there are tons of people waiting for $42K so they can buy.

I'm just saying we literally saw institutional buying dry up after that fake double spend news hit. It went from majorly buying the dip to being scared and holding off. Grayscale buys for instance almost entirely dried up after that fake news spread. It seems institutions fear buying the dip just as retail investors do. But that's likely because they are new to the game and they got scared when suddenly there was a lot of FUD coming from public figures on wall street saying the bull run is over and its going back to $20k. In general institutions I expect to hold long term a lot more than the average retail investor, but they do seem to get scared at least on the first dip they see after investing, just like the retail market does. I mean I was surprised that they acted like retail investors on the dip, after initially buying the dip, and got scared off, but that is precisely what just happened a few weeks ago. I'm thinking it's probably just a first dip thing though, so the ones who already were in during that correction won't be scared by the next one, but new institutional money getting in now could be scared off again when they see their first correction.

One random company that bought like 130 BTC in december even sold it all at low 30s when the double spend lie hit the airwaves cuz they got scared off haha. Bet they are kicking themselves for that panic sell now!

[thecodebear]

Apparently the sale has ended:

Apparently, they completed the sale of their convertible bond:


https://twitter.com/michael_saylor/status/1362785854758993927?s=20

Please note that they allocated 14 days to perform the sale, but only one day was enough.

This could explain the price action, either or they already bought 1.05 Billion, or they are going to buy this soon!

In the linked thread I posted a few mumblings on this bond sales, for example here and here.

Oh yeah I forgot they were offering clients the option of purchasing an additional 150 million. Guess clients took them up on the offer haha. Damn another 1.05 billion to buy Bitcoin...that is a lot! I like how it went from $600 million to $1.05 billion in just a few days.

Wonder if they actually bought today or if just the news of the sale closing is what popped the price. I remember in their first buy back in August it took Coinbase I think a few days to buy $250 million for them, so I would assume they didn't already make $1.05 billion in buys.

[fillippone]

Oh yeah I forgot they were offering clients the option of purchasing an additional 150 million. Guess clients took them up on the offer haha. Damn another 1.05 billion to buy Bitcoin...that is a lot! I like how it went from $600 million to $1.05 billion in just a few days.

Well, I said in my other thread:

• 13 days selling window. This means the sale ends on March 5th. But I expect it to close earlier due to massive demand

Actually, I didn't expect SO earlier.

Wonder if they actually bought today or if just the news of the sale closing is what popped the price. I remember in their first buy back in August it took Coinbase I think a few days to buy $250 million for them, so I would assume they didn't already make $1.05 billion in buys.

And you are right, Coinbase will churn out the 20,000 BTC in a few days, don't worry, we will be updated on it sooner than we might think.

[acquafredda]

Unbelievable what is happening here! I would have never imagined this even in my wildest dreams - I now truly realize I was so lucky to see bitcoin like it is seen now before others. I am a super small fish but I hold some small amount that makes me at least one in 21 million.
These guys are totally coming after all of our coins but we ain't selling, am I right?