MicroStrategy CEO Likens Borrowing to Buy Bitcoin to Investing Early in Facebook
The CEO of business intelligence firm MicroStrategy, which holds more than 105,000 bitcoins in its reserves, told CNBC Friday that borrowing money now to buy more bitcoin was like investing in one of today’s dominant tech companies in the early days.
“If you borrow billions of dollars at 1% interest and invest it in the next Big Tech digital network that you thought was going to be the dominant Amazon or Google or Facebook of money, why wouldn’t you?” MicroStrategy’s Michael Saylor said, according to CNBC. “I mean, if I could borrow $1 billion and buy Facebook a decade ago for 1% interest, I think I would’ve done quite well.”
Saylor noted that his company currently has $2.2 billion of debt and pays about 1.5% interest on that debt. Since last August, his company has financed its purchases of massive amounts of bitcoin via company cash flows, equity issuance, convertible debt, senior secured debt and a $1 billion shelf registration.
“Our point of view is being a leveraged, bitcoin-long company is a good thing for our shareholders,” he said.
Saylor also said that the notoriety that its bitcoin purchases have given the company has elevated its brand by a factor of 100.
MicroStrategy issued its second-quarter earnings report on Thursday, in which it said it planned to continue amassing bitcoin on its balance sheet.
At the end of June, MicroStrategy’s bitcoin holdings were worth $3.65 billion, reflecting bitcoin’s market price of $34,763 at the time. The non-GAAP digital asset cost basis of those holdings was $2.74 billion, or $26,080 per bitcoin.Source