On December 19th, according to Bloomberg, Michael Saylor, co-founder and chairman of MicroStrategy, stated that once the current fundraising plan is exhausted, the company will shift from a leveraged Bitcoin agency program to a more focused fixed income securities program to raise funds to purchase cryptocurrencies.
When asked how he expects to fund future cryptocurrency purchases, Saylor expressed this preference in an interview. So far, MicroStrategy has adopted a combination of new stock and convertible bond sales to fund purchases, the latter of which has brought returns to shareholders as its stocks have risen to the price at which they can be exchanged.
Saylor said, “We have $7.2 billion in convertible bonds, but $4 billion of them are essentially equity, traded through strike prices and call prices, with a delta of about 100%, resembling equity. We hope to go back and establish smarter leverage to benefit our common stockholders
Hedge funds have been searching for their fixed income securities to implement convertible arbitrage strategies – buying bonds and short selling stocks, essentially betting on the volatility of the underlying stocks. This demand has driven MicroStrategy to issue convertible bonds worth $6.2 billion this year.
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