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??

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[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