A lackluster balance sheet, excessive debt load and over-leveraged exposure to Bitcoin have crashed MicroStrategy stock by more than 63% since February already. Nevertheless, the business intelligence company has ignored the risks of its frothy valuations, and it now wants to raise more debt and buy Bitcoin with proceeds (BTC).
MicroStrategy announced on June 7 that it “intends to raise $400 million aggregate principal amount of senior secured notes in private offering […] to acquire additional Bitcoins.” The company already holds more than 92,000 BTC, worth about $3.31 billion at current exchange rates — almost 1.5x its principal investment.
BTC/USD (blue) vs. MSTR (orange) YTD performance. Source: TradingView
MSTR plunged 2.17% to $469.29 per share after the New York Stock Exchange’s opening bell on June 7. At its year-to-date high, it was changing hands for $1,135.
Not making money
In previous statements, MicroStrategy clarified that it is building up a Bitcoin portfolio as an insurance policy against the continuing devaluation of the world’s major currencies. But with its