MicroStrategy stock falls as bitcoin slide continues
Shares of MicroStrategy (MSTR) fell on Tuesday after the company completed a convertible debt offering. The company says the money from the offering was used to buy more bitcoin (BTC-USD), something Executive Chairman Michael Saylor told Yahoo Finance he was going to do. The move comes as bitcoin falls from its record highs.
In the video above, Yahoo Finance's David Hollerith discusses MicroStrategy's bitcoin strategy.
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Editor's note: This article was written by Stephanie Mikulich.
Video Transcript
- Time now for a look at some of the day's trending tickers as we near the closing bell here on Wall Street. Starting with MicroStrategy. Shares are falling after announcing the completion of another convertible notes offering to fuel its Bitcoin purchases. He was an amazing stat here so PIMCO strategy. Ally now does own about 1% of all Bitcoin with this latest purchase. This is per Bloomberg notes that the firm made its second multi-million dollar purchase on Bitcoin in a little more than a week. Obviously you know Michael Saylor. I mean that's a Bitcoin believer. If you've ever seen one started buying Bitcoin back in 2020. So he's been through the fires with this one. Though it remains the company now holds about 214,000 tokens valued at around $14 billion.
- Yeah. MicroStrategy the largest corporate holder of Bitcoin. Now this is the second convertible debt offering in a week to raise money to buy Bitcoin. Interesting to see the stock recover some of its earlier losses. Because it was down as much as 18% earlier in the session. We've also seen Bitcoin come down a bit from those record highs. We saw a week ago, now we're trading at just under $65,000 a coin. And I want to bring in Yahoo Finance's David Hollerith. He's been following this story for us. So David, what do you make of MicroStrategy and really the future of this company?
DAVID HOLLERITH: Ali it's very simple. Is that MicroStrategy buys Bitcoin consistently. Sometimes it issues debt to do that. And then crucially it never sells its Bitcoin. And it's crazy that the strategy is that simple. That's literally all they do. Founder Michael Saylor-- Oh excuse me, they do own a cloud software business. But as far as how the stock trades, it's mainly a function of where the Bitcoin price is. And whether or not it's going up and down, there's always a big premium between MicroStrategy stock and the Bitcoin price in terms of what the performance is doing. And founder, Michael Saylor who stepped down in 2022 remains chairman of the board at MicroStrategy. But he's mainly given his time to Bitcoin education. And to give you an idea of how Saylor talks about Bitcoin, here's some of what he said in an interview with US last week.
MICHAEL SAYLOR: The highest best use of capital is to buy Bitcoin and hold the Bitcoin. The Bitcoin is going to appreciate in value faster than the S&P index. It's going to appreciate in value faster than commercial real estate. And so there-- there's no point in selling the winner to buy the losers. And Bitcoin is the winner.
DAVID HOLLERITH: the wrinkle here that skeptics and short Sellers will point out is that, since the beginning of the year Michael Saylor does not sell Bitcoin but he does sell shares of MicroStrategy that he personally owns. And he's on a consistent schedule to do that. And he's profited handsomely from that. So obviously insiders are allowed to do this. But that is the other side of this, is that Michael Saylor does obviously benefit from investors. Thinking that MicroStrategy is a company that will never sell its Bitcoin.
- Yeah. Well we'll see if that Bitcoin can get back to those record highs. I'm sure Michael Saylor will be very happy if that's the case. But Thank you, David so much for that insight.
