Less Noise, More Signal The Convertible Bond Trader: "Microstrategy is making every TradFi pro pay attention to Bitcoin.”
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Nov 14, 2024 In this conversation, Richard Byworth, a seasoned convertible bond trader and managing partner at Syz Capital, shares his insights into MicroStrategy's innovative approach to Bitcoin. He discusses how the company uses convertible bonds and ATMs to attract traditional investors. Byworth delves into the complexities and risks of these financial strategies, while assessing their implications on the capital markets. He also speculates on Bitcoin's future as an asset class and its potential to redefine investor dynamics in cryptocurrency.
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Saylor's Bitcoin Journey
- In 2013, Michael Saylor predicted Bitcoin's failure, comparing it to online gambling.
- However, in 2020, he changed his stance and began investing MicroStrategy's cash reserves into Bitcoin.
Sophisticated Instruments
- MicroStrategy's Bitcoin acquisition strategy evolved from using operating cash to issuing equity and convertible bonds.
- This allowed Saylor to leverage market dynamics and acquire more Bitcoin, increasing the company's value.
ATM Offering
- MicroStrategy utilizes an at-the-market (ATM) offering, a US-specific mechanism, to sell shares directly into the market.
- This allows them to capitalize on price spikes and raise capital flexibly, adding value for shareholders.