CandleFocus The ‘Infinite Money Glitch’: MicroStrategy’s Bitcoin Strategy Under Scrutiny
2024-11-17
Author: Content Editor
MicroStrategy owns 250,000 Bitcoins worth $17 billion and its stock is valued at $43 billion. Despite having $4.25 billion in debt, the company continues to raise money by selling shares to buy more Bitcoin. This strategy is similar to Grayscale Bitcoin Trust's pattern in the past. Concerns about MicroStrategy's long-term viability remain due to its complicated financing and the volatile market. The company has raised $4.4 billion through five equity offerings, increasing its stock's book value. However, analysts find the company's $43 billion valuation excessive compared to its net asset value. MicroStrategy's co-founder, Michael Saylor, has faced criticism for his views on privacy technologies and Bitcoin developers. The company's outstanding bonds have various conversion options, adding complexity to its valuation. Despite Bitcoin price volatility, MicroStrategy's software business generates enough cash flow to cover interest payments. However, zero-coupon bonds introduce additional risks.
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