When Michael Saylor mentions “bitcoin,” MicroStrategy shares pop. He’s been saying a lot recently.
On Monday, the MicroStrategy founder said on social media site X that his company had purchased an additional 12,000 bitcoins for over $822 million, “using proceeds from convertible notes & excess cash.” This takes MicroStrategy’s total holdings to 205,000 bitcoins, valued more than $15 billion as the cryptocurrency reaches new highs.
Bitcoin climbed 2.7% on Wednesday, surpassing $73,400.
MicroStrategy, a software developer and proxy for bitcoin, increased by 11% on Wednesday. This follows a 7.4% surge on Tuesday, a 4.1% gain on Monday, and a 9.7% increase on Friday. The stock has risen 68% since March 6, when the business disclosed the pricing of a debt sale, and has soared 180% this year after rising 346% in 2023.
Saylor told CNBC’s “Squawk Box” on Monday that bitcoin will “eat gold.” He predicted that once the digital currency is incorporated to exchange-traded funds, an increasing number of institutional investors will own it. Furthermore, Saylor is optimistic about next month’s halving procedure, which happens every four years and limits the production of coins, lowering the amount of selling.
“The price of bitcoin is going to have to adjust up in order to meet that investor demand,” he said. “That’s what’s going to happen next for the asset class.”
MicroStrategy announced on Monday that it has completed an offering of 0.625% convertible notes due in 2030 for a net proceeds of approximately $782 million. Canaccord Genuity analysts noted in a note that day that they believe it is the first $800 million convertible due in 2030 sold at a coupon rate of less than 1% with such a substantial conversion premium.
“While much of the company’s BTC accumulation late last year and early this year was funded using equity,” the Wall Street analysts wrote, “the company this time instead exploited more of its full capital structure by issuing a convert.”
MicroStrategy stated in the release that company “used the net proceeds from the sale of the notes to acquire additional Bitcoin.”
MicroStrategy has purchased around 16,000 bitcoins since the beginning of the year.
Its stock value is increasing at a significantly quicker rate than the bitcoin it is purchasing. As of Monday, Canaccord estimated that MicroStrategy’s equity value premium over its bitcoin holdings was 86%.
That number has increased significantly in the last three days. Using Canaccord’s analysis, MicroStrategy’s equity value premium is now around 99%.
MicroStategy, founded in 1989, sells enterprise software and cloud-based services, but its shareholder value is virtually completely determined by its Bitcoin ownership. The corporation declared its intention to invest in bitcoin in mid-2020, stating in an earnings call that it would commit $250 million over the next year to “one or more alternative assets,” which may include digital currencies such as bitcoin.
At the time, MicroStrategy’s market cap was about $1.1 billion. The company is now worth $30 billion.
“Is there any company in the world that you wouldn’t like to invest in that could borrow $1 billion at less than 1% interest to invest in your best idea?” Saylor asked on CNBC. “It’s given our shareholders more bitcoin per share this week than they had a few weeks ago, so it’s very accretive for them.”
