Amodh Shetty
@theamodhshetty
How a business intelligence firm is Stacking up on BTC by the billions? It sounds too wild to be real. But, CEO Michael Saylor’s debt-fueled Bitcoin approach is either genius or pure folly. lets break it down🧵 MicroStrategy was once known for its software. Today, it’s practically a Bitcoin holding company. Since August 2020, Saylor has stacked more than 450,000 BTC It all started with $250 million purchase funded by cash on hand.Then issued convertible notes (low-interest debt that can turn into equity) and senior secured notes (higher interest, backed by company assets) to fund bigger and bolder BTC buys. By late 2024, MicroStrategy took it up a notch. The firm proposed expanding its share count (from 330 million to over 10 billion) and its preferred stock (from 5 million to around 1 billion). The reason? So they could raise money more flexibly to buy even more Bitcoin. Saylor calls it the 21/21 Plan he aims to raise $42 billion in three years, split between equity sales and fixed-income
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Amodh Shetty
@theamodhshetty
instruments. This capital not only funds BTC purchases but could also fuel other crypto ventures. Then there’s the dilution risk. Every time $MSTR stock trades above the value of its #BTC holdings, the company raises more money by selling shares or debt then uses those funds to buy more Bitcoin. But if you ask Saylor,he compares it with New York real estate developers leveraging rising property values to build higher and issue more debt. He says it’s an “economy,” not a Ponzi, pointing to centuries-old practices in real estate. The U.S SEC defines a Ponzi scheme as fraud where old investors are paid with new investors’ money. In MicroStrategy’s case,analyst Mark Kruger says, the firm simply borrows or raises equity to buy more BTC hardly the same pattern.
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