Microstrategy Inc - Prices $875 Million Of 0.625% Convertible Senior Notes Due 2028

In a candid interview, MicroStrategy Executive Chairman Michael Saylor shared insights on his company’s Bitcoin strategy and his outlook for the future of digital assets.

What Happened: In an interview on the Bitcoin Standard podcast, Saylor said his conviction in Bitcoin as the ultimate store of value remains unwavering. He argued that Bitcoin’s historical returns of around 46% annually make it difficult for other investment opportunities to compete.

“Bitcoin’s up like 46% ARR every year for the past four years. So 50% is my risk-free return. Are you going to give me a proposition that is risk-free better than 50%?”

Looking ahead, Saylor presented a 21-year forecast model dubbed “Bitcoin 24.” His base case projects a 29% annual return for Bitcoin over the next two decades, potentially reaching $13 million per coin by 2045.

While bullish on Bitcoin, Saylor doesn’t see it as a zero-sum game for other asset classes. He expects Bitcoin to grow from 0.1% of global wealth to about 7% by 2045, coexisting with traditional assets like equities and real estate.

“MicroStrategy’s up 964% since August 10th, 2020,” Saylor noted, comparing it to other top performers like Nvidia (up 94%) and Bitcoin itself (up 387%).

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Also Read: MicroStrategy Doubles Down On Bitcoin: Can The Stock Sustain Its Rally?

Saylor believes, "Bitcoin is introducing a rationality virus... I’m in favor of gradual, graceful, gentle spreading of the rational virus, which I think will get us to a different place.”

As for corporate adoption, Saylor anticipates more companies will follow MicroStrategy’s lead in allocating treasury reserves to Bitcoin. He speculates on the impact if tech giants like Apple or Meta were to invest their cash flows into Bitcoin instead of stock buybacks.

While acknowledging regulatory hurdles and the need for traditional banking support, he said "I don’t think it’s going to be a doomsday scenario. I think it’s going to be a utopia when we start saving in something other than government coupons.”

As Bitcoin approaches its next halving and enters a new four-year cycle, Saylor’s unwavering commitment and long-term vision continue to shape the narrative around institutional Bitcoin adoption.

What’s Next: The influence of Bitcoin as an institutional asset class is expected to be thoroughly explored at Benzinga’s upcoming Future of Digital Assets event on Nov. 19.

Read Next: 

• MicroStrategy’s Bitcoin ‘Strategy Playbook’ Explained: Will Others Follow This ‘Radical Step’?

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© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

MicroStrategy Inc continues its audacious bet on Bitcoin , recently purchasing $1.11 billion worth of the cryptocurrency between August and September.

This latest buy brings the company's Bitcoin holdings to a staggering 244,800 coins, now valued at approximately $9.45 billion.

As MicroStrategy increasingly ties its fortunes to the volatile world of Bitcoin, investors are left wondering: Can the stock keep its momentum, or is a correction looming?

MicroStrategy CEO Michael Saylor's commitment to Bitcoin has sent the stock up 96% year-to-date and a whopping 295% over the past year. The company is raising an additional $700 million through convertible bonds to buy more Bitcoin, signaling it's not slowing down anytime soon.

But while the long-term strategy might pay off, the near-term technical picture raises some concerns.

Read Also: MicroStrategy Is ‘Aggressive’ With ‘BTC HODL’, Analyst Says, Citing New Bitcoin Buys

Mixed Technical Signals: A Rally Or A Pullback?

Despite the bullish sentiment surrounding MicroStrategy's Bitcoin investments, the technical analysis presents a more cautious outlook.

Technology stocks were flat to higher premarket Tuesday as the SPDR S&P Semiconductor ETF was inactive and the Technology Select Sector SPDR Fund was up nearly 2% recently.

SES AI shares rose past 34% after the company said it has initiated a project to accelerate material discovery in electric vehicles using Crusoe's cloud platform powered by Nvidia and Supermicro .

MicroStrategy shares were over 2% higher after the company said it plans to raise $700 million from a private offering of convertible senior notes due 2028.

Palantir Technologies shares advanced by over 2% after the company said it signed a multi-year contract with Nebraska Medicine to enhance healthcare through its artificial intelligence platform.

MicroStategy, Inc. shares are trading lower in Monday's extended trading session after the company announced a private offering of $700 million of convertible senior notes. 

The Details: MicroStrategy announced it intends to offer $700 million aggregate principal amount of convertible senior notes due 2028 and also expects to grant to the initial purchasers of the notes an option to purchase up to an additional $105 million aggregate principal amount of the notes. 

Read Next: NVIDIA, Micron, SMCI Stocks Are Down Monday: What’s Going On?

The company said it will use the proceeds from the offering to fund the conditional full redemption of $500 million of MicroStrategy’s outstanding 6.125% senior secured notes due 2028.

MicroStrategy said it will use the balance of the proceeds from the offering to purchase additional Bitcoin and for general corporate purposes. 

MicroStrategy shares fell nearly 5% in regular trading Monday after Canaccord Genuity maintained its Buy rating, but lowered its price target on the stock from $185 to $173.

MSTR Price Action: According to Benzinga Pro, MicroStrategy shares are down 1.47% after-hours at $132.55 at the time of publication Monday.

Read Also:

• Alibaba, NIO, Other Chinese Stocks On Watch Following Weak Economic Data: What To Know

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© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.