MicroStrategy CEO Considers Raising More Debt to Buy Bitcoin
(Bloomberg) -- MicroStrategy Inc.’s Michael Saylor says he will consider issuing more debt in order to help finance the company’s purchase of Bitcoin as part of its corporate strategy.
“We’ve been pretty clear that we’ll consider equity and debt financings,” in order to buy more Bitcoin Saylor said at the Bloomberg Crypto Summit during an interview with Joe Weisenthal. “It makes sense to buy as much of that asset class as we can,” he said.
Saylor, among the first chief executives to convert company cash to Bitcoin, began buying the digital asset last year. This week alone, MicroStrategy announced that it had acquired nearly 20,000 tokens for an average purchase of $52,765 per coin after issuing $1.05 billion in convertible bonds. The firm has now plowed approximately $2.2 billion into the world’s largest cryptocurrency and held an aggregate of approximately 90,531 Bitcoins as of Feb. 24.
Those holdings are now worth approximately $4.5 billion. Last year, the enterprise-software maker reported a net loss of $7.5 million, or 78 cents a share, as revenue declined 1.2% to $480 million, according to data compiled by Bloomberg. Meanwhile, MicroStrategy stock has surged almost 500% in the past year.
Saylor has been one of leading advocates of converting company cash to Bitcoin, saying that that the Federal Reserve’s relaxing of its inflation policy helped convince him to invest MicroStrategy’s reserves. So far, few have followed, though earlier this month Tesla Inc. announced that it invested $1.5 billion of its $19 billion cash pile into Bitcoin.
Bitcoin advocates point to the 21 million coins that can only ever be mined under the current version of the cryptocurrency’s software. Saylor has described Bitcoin as “the scarcest asset in the world.” The limit is expected to be reached in 2140.
Saylor said in the interview that companies need to keep up with the cost of capital, adding that corporations should work with institutional-grade custodians to hold their Bitcoin.
“If you want to preserve shareholder value, you have to hold scarce assets,” he said. “Bitcoin is the most liquid, scarce, uncorrelated asset you can buy.”
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