MicroStrategy to turn to fixed-income securities to raise funds for Bitcoin purchases

BlockBeats news, December 19, according to Bloomberg, MicroStrategy co-founder and chairman Michael Saylor said that once the current fundraising plan is exhausted, the company will shift from the leveraged Bitcoin proxy plan to focus more on fixed-income securities 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 used a combination of new stock and convertible bond sales to fund purchases, the latter of which has brought returns to shareholders as its stock has risen to a price that can be exchanged for shares.

“We have $7.2 billion in convertible notes, but $4 billion of them are essentially equity, and they trade through strike prices, call prices, and they have a delta of about 100%, which makes them look like equity, and we want to go back and build smarter leverage to benefit our common shareholders,” Saylor said.

Hedge funds have been looking for their fixed-income securities to implement convertible arbitrage strategies - buying bonds and shorting stocks, essentially betting on the volatility of the underlying stocks. This demand has driven MicroStrategy to issue $6.2 billion worth of convertible bonds this year.