Why MicroStrategy Bought $40 Billion Worth of Bitcoin — ft. Michael Saylor
Prof G Markets
Deep Dive
Why did MicroStrategy pivot from a business intelligence firm to a Bitcoin treasury company?
MicroStrategy pivoted due to desperation and frustration with their cash reserves generating zero percent interest and the company not growing. They saw Bitcoin as a growing asset with a 60% annual growth rate, resembling a de-facto monopoly, and decided to transform their business model.
How did MicroStrategy raise capital for its Bitcoin investments?
MicroStrategy raised capital through convertible bond markets, issuing bonds at zero percent interest and later at 6% interest. They also raised equity through the capital markets, leveraging their high-volatility stock to attract investors.
What is MicroStrategy's strategy for managing Bitcoin volatility?
MicroStrategy sells volatility by issuing convertible bonds and capturing spreads. They also generate interest by holding Bitcoin and selling call options, making money even if Bitcoin's price declines.
Why does Michael Saylor believe Bitcoin is the most interesting asset in the world?
Saylor believes Bitcoin is the most interesting asset because it is the hardest money in history, representing property rights and economic security for billions. It is a global, real-time asset that changes value every second, making it financially engaging for millions.
What advice does Michael Saylor give regarding investing in Bitcoin?
Saylor advises diversifying investments and not putting more than 20-25% of one's wealth into Bitcoin if under 45, and no more than 10% if over 45. He emphasizes the importance of gradual investment to mitigate risk and enjoy the potential rewards without excessive anxiety.
- Intel's revenue declined by 30% under Pat Gelsinger.
- The company's stock value has decreased by 60% during his tenure.
- Major shareholders control a significant portion of Intel's voting power.
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