MicroStrategy’s strategy is a dangerous game of smoke and mirrors. Raising $2 billion through convertible senior notes to buy more Bitcoin—what could possibly go wrong? They sell stock at inflated prices, pump Bitcoin, and repeat the cycle. Meanwhile, the company rakes in money from institutional investors while hiding behind the corporate veil. If this crumbles, Michael Saylor’s personal wealth won’t take the hit, but those who bought in will be left holding the bag. It’s a high-stakes gamble with other people’s money, not his own savings. Meanwhile, he’s playing the hero, but he’s a thousand miles away from the front line.
Rinse and repeat: raise money, buy Bitcoin, pump the price, sell more stock. The cycle keeps spinning, but the risks are all too real for those left in the dust.
Sources:
https://beincrypto.com/microstrategy-2-billion-stock-offering-to-buy-more-bitcoin/
https://coincentral.com/strategy-announces-2-billion-note-offering-to-fund-bitcoin-purchases/