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BTC217: MicroStrategy 2025 w/ Jeff Walton (Bitcoin Podcast)

154 snips
Jan 15, 2025
Guest
Michael J. Saylor
Guest
Jeff Walton
In this episode, Jeff Walton, an expert on MicroStrategy's financial strategies, joins Michael Saylor, CEO of MicroStrategy. They discuss leveraging Bitcoin volatility and innovative fundraising through convertible bonds. Walton explains 'capturing the spread' and describes how MicroStrategy positions itself as the 'bank of the future.' They also delve into the nuances of corporate strategies like accretive dilution and the future potential of Bitcoin-backed financial products, creating an optimistic outlook for investors.
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INSIGHT

Capturing the Spread

  • MicroStrategy's Bitcoin strategy involves capturing the spread between the company's market value and its Bitcoin holdings.
  • Issuing shares at a premium and buying Bitcoin increases Bitcoin per share, benefiting shareholders.
INSIGHT

Leverage and Capital

  • MicroStrategy's $42 billion capital plan, using equity and convertible debt, is the largest ever.
  • This plan reduced their leverage ratio, making them financially stronger and potentially under-leveraged.
INSIGHT

Future Funding

  • Due to improved leverage ratio, MicroStrategy might secure cheaper funding in future convertible debt rounds.
  • This could involve pushing the conversion strike price higher, benefiting common shareholders.
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