Unlock the Editor’s Digest without cost
Roula Khalaf, Editor of the FT, selects her favorite tales on this weekly e-newsletter.
If there’s one firm that has really mastered the artwork of turning fairness into cryptocurrency, it’s Technique — previously often known as MicroStrategy.
Yesterday, the corporate unveiled its newest gambit: a brand-new $21bn shelf registration to sell common stock via an at-the-market (ATM) offering, having solely simply burned by the earlier $21bn shelf filed in late October 2024. At this fee, the Technique juggernaut is selecting up each momentum and mass and can possible hold doing so for so long as traders are prepared to pay a premium to underwrite its crypto campaign.
And what a campaign it’s. Technique now holds 553,555 bitcoins or 2.64 per cent of whole provide, acquired at a median value of $68,459 apiece and presently price over $53bn. That makes it the undisputed heavyweight champion of company bitcoin holders, a title it clearly has no intention of surrendering.
Why cease now? So long as the market is prepared to worth Technique’s shares at more than double the net asset value of its bitcoin stash, govt chair Michael Saylor will hold issuing inventory to purchase extra. It’s a gloriously self-reinforcing loop: each share offered above NAV is, by definition, accretive. The arithmetic is brutally simple, and so long as the music performs, Technique will hold dancing.
It’s not simply frequent inventory, both. Technique has been merrily tapping the capital markets with convertible bonds and never one however two flavours of most popular inventory (dubbed “Strike” and “Strife”) to lift money to binge on bitcoin. And there’s no purpose to assume the punchbowl goes away any time quickly.
The sheer nerve of Technique’s pivot — from a dusty enterprise software program vendor to a bitcoin-gobbling machine — is frankly astonishing. Since August 2020, when Technique first determined to wager the farm on crypto, its shares have surged greater than 26-fold (that’s not a typo), though its precise cumulative acquire from its bitcoin investments is just 41 per cent.
The world-beating inventory value efficiency isn’t just a rerating; it’s a metamorphosis of virtually cartoonish proportions. Some might scoff and say Technique is little greater than a leveraged bitcoin ETF wrapped in a company disguise, with a capital construction that subordinates the pursuits of its frequent stockholders, however attempt telling that to traders who’ve been browsing this wave for the reason that starting.
After all, all of this monetary engineering hinges on two rather large conditions: that bitcoin’s value stays elevated, and that the market continues to bless Technique’s shares with a beneficiant premium. The 2 are linked, in fact — however ought to both falter, the virtuous loop might unravel with uncomfortable velocity.
Whether or not this all quantities to genius or lunacy reasonably will depend on your opinion of bitcoin itself. However no matter your take, the sheer chutzpah is simple. Within the grand historical past of monetary reinvention, Technique’s transformation ranks among the many most audacious — and, up to now no less than, one of the profitable.
Simply don’t ask what occurs if bitcoin tanks, the premium evaporates, and Technique has to rustle up money to redeem that $1bn convertible bond due in 2028 (with an investor put option in September 2027). The corporate reported solely $60.3mn of money on its steadiness sheet on the finish of the primary quarter of 2025.
For now, although, with bitcoin flirting with $97,000 and investor urge for food for Technique’s inventory exhibiting no indicators of waning, Technique’s technique is working. Traders hold betting on bitcoin as a hedge against dollar debasement and hold paying a hefty premium to entry the Saylor spectacular.
Additional studying:
— If bitcoin is the future, what explains MicroStrategy’s need for speed? (FTAV)
— MicroStrategy’s secret sauce is volatility, not bitcoin (FTAV)
— Examining MicroStrategy’s record-shattering $21bn ATM (FTAV)
— Buy higher, pump harder (FTAV)
— The trouble with strife (FTAV)
