We’ve been forced to write a few times about MicroStrategy and its yacht-loving CEO Michael Saylor lately. For those not in the know, this is the company that decided to invest billions of Federal Reserve-backed 1s and 0s strings into bro-backed 1s and 0s, and turned its equity into a HODL proxy.
You might remember our GigaChad was part of this recent dramatic and monochromatic call to arms alongside Bitcoin televangelist Max Keizer, which we still can’t shake and therefore feel compelled to post again:
Last Monday, we told you that the software company turned crypto collector announced that it was raising $ 400 million in senior secured debt to add to its stash of 92,079 bitcoins (roughly $ 3.7 billion). at the cost of that particular nanosecond).
The announcement coincided perfectly with another rather less fortunate one: that the company also expects to suffer an impairment “of at least $ 284.5 million related to its bitcoin for the three months ending June 30. 2021 “.
But Michael Saylor is not the kind of man who would let the loss of 78 percent of his equity come back to him. Oh no, MicroStrategy is tripling now.
Late Monday, the company announced – using a so-called ‘store registration’ process, which allows issuers to offer and sell securities but without a separate prospectus for each offering – that it would sell for up to $ 1 billion. dollars of its Class A shares to be spent on “general corporate purposes”, including, naturally, “the acquisition of bitcoin”.
Earlier today, the company announced that it has finalized the junk bond sale it announced last week – raising a little more than expected, $ 488 million – in honor of its tower swollen and wobbly bitcoin. So it would be on top of that.
The company reports some potential risks in its S-3 filing, such as (emphasis added):
if we or our third party service providers experience a security breach or cyber attack, or if our private key is lost or destroyed, we can lose some or all of our bitcoins
the concentration of our bitcoin holdings increases the risks inherent in our bitcoin acquisition strategy
our bitcoin holdings are less liquid than our existing cash and cash equivalents and may not be able to serve as a source of liquidity to the same extent as cash and cash equivalents
our bitcoin holdings may subject us to regulatory scrutiny
But he quickly switches to more optimistic things, telling us that he only has two simple strategies:
We are pursuing two business strategies: (1) grow our business analytics software business to promote our vision of Intelligence Everywhere and (2) acquire and retain bitcoin, which we see as a reliable store of value backed by a robust, public and open source architecture, independent of sovereign monetary policy.
Quite reliable, except when it plunges 30% within a few hours. Intelligence Everywhere indeed.
Additionally, strategy (1) is about to get bitcoin glitter on it:
We are also exploring opportunities to apply bitcoin-related technologies such as blockchain analysis in our software offerings.
The company also said it has diversified into bitcoin
We also believe that bitcoin offers an additional opportunity for value appreciation with increasing adoption due to its limited supply. As part of this corporate strategy, we also periodically engage in activities to educate the market regarding bitcoin. We believe our bitcoin acquisition strategy is complementary to our business analytics software and services business, as we believe our bitcoin and related activities in support of the bitcoin network enhance our brand awareness. and may provide opportunities to secure new customers for our analytics offerings.
Oddly enough, we actually learned something we didn’t know about bitcoin through the deposit itself, so it turns out that education is in full swing:
Bitcoin can be used to pay for goods and services
Additionally, they will likely add to their HODLings and hardly ever sell:
We view our bitcoin holdings as long-term holdings, and we do not plan to trade bitcoin on a regular basis and have not hedged or otherwise entered into derivative contracts regarding our bitcoin holdings, although we may sell bitcoin in the future periods if necessary. generate cash for cash management and other general business purposes. We have not targeted any specific amount of bitcoin holding, and We will continue to monitor market conditions to determine whether to proceed with debt or equity financing to purchase additional bitcoin.
Spend like a Saylor indeed. Satoshi must be so proud.
MicroStrategy redoubles – FT Alphaville
Maybe the “bitcoin brothers” aren’t really a thing after all – FT Alphaville