MicroStrategy Deep Dive (Part 3: Convertible Bonds)

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In this video, I discuss how MicroStrategy uses convertible bonds to raise more capital to buy BTC, as well as how convertible bonds work.

Convertible bonds are a strange hybrid of stock and bond, and include an embedded call option that allows holders to convert the bond to shares of stock, if the underlying stock is trading above a certain strike price.

MicroStrategy's use of convertible bonds and other financing is one of the most amazing examples of financial engineering that I've ever seen. That being said, I still prefer to hold BTC, since it is a bearer asset.

Not investment advice! Consult a financial advisor.

Should You Buy Bitcoin, or Bitcoin Stocks?

MicroStrategy Deep Dive (Part 1):

MicroStrategy Deep Dive (Part 2):

Example of a MSTR convertible bond:

Some people don't understand:

MSTR investor presentation:

Great summary of MSTR's business model:

I am not being paid or otherwise compensated by any company or cryptocurrency project that I mention in my videos. My opinion is not for sale. Please do not contact me with any affiliate or advertising deals.

#Bitcoin
#michaelsaylor
#microstrategy

Disclaimer

[Bitcoin_University]

Get my paid options and trading courses:

[MrDinkles]

Watching lil Andrew at CNBC try to wrap his brain around Bitcoin and MSTR over the years has been an absolute delight 🙃

[randoroo]

Excellent series Mr. Kratter. You captured the essence of what microstrategy is doing very well. As a longtime MSTR shareholder I've been very happy with Mr. Saylor's dedication to this strategy and have also enjoyed how it has befuddled so many in traditional finance.

[Atlas_]

In case some new subs where wondering why this channel is called 'University'.... these videos are top notch lectures.

[aalbi]

Thank you for this brilliant summary of Saylor's strategy. I've been "over-weighted" in MSTR for over a year in my IRA. It's performed far beyond my expectations. At some point, I will lighten up but your stamp of approval has been very assuring.

[firecogs]

This series of videos is quickly turning into into the Game of Thrones of YouTube. Can’t wait for part IV!

[pierreparfaite]

This has been a very informative series! I don't comment often, but I think this deep dive series was one of your best! Thanks Matthew! Long MSTR ❤

[CalebBoucher]

Best! Good job! I will now and forever just forward this video instead of trying to explain it myself. Brilliant!
Don't forget to include MSTX and MSTY in a future explainer please and thank you.

[AdamHutchinsAuxiliarySer-gjsr]

you are the most succinct and accurate youtube show there is !!! Thank you and have a great Thanksgiving as well!!!!

[jamesthompson]

This series has been wonderful, Matt. I think it is some of your best work. Thank you!

[tarashihiko]

Have a great Thanksgiving, Matt. Thank you for the wonderful insight, as always.

[jackthehatphoto]

Fantastic video. Congrats on being one of the few experts to understand MSTR properly.

[placebogazebo]

Last Thursday, before that epic dump, some of the bonds could have reached their convert price that day! We were at $540 in the morning and the strike price on those convertibles was around $655. So having 4 years to grow the price that high should be as easy as cake.

[crisper]

Matt pulling out his old Tradfi knowledge here.

[upup]

Saylor is effectively an alchemist. Turning paper into gold. One of the greatest companies ever

[psychedwellness]

Great video series and right on time as I've been contemplating MSTR. I've got money locked up in a 401k that I want to get exposed to BTC, and this really gave me some things to chew and exposed some areas I need to gain a greater understanding. Thank you for the education. Happy Thanksgiving!

[michaelgross]

Thanks, Matt, for an informative series on such an important topic. Would definitely love to see more videos like this.

[properchels]

Great series and explainers Matthew, thanks. A few questions:

1. Does the stock price have to rally past the strike price at any time in the 5 years? Or it has to be at or above when they mature?

2. Can a convertible bond holder choose to convert to shares at any time during the five years if the stock price rallies past the strike price?

3. Could they ask for their principal back at any time during the five years?

[treystr]

Best deep dive I’ve seen.. thanks Matthew!

[Johnsy]

As usual, you have taken complex topics and broken them down very nicely! I understand MSTR much better now! Thank you for your excellent series of videos on MSTR! Wishing you a very Happy Thanksgiving. I am thankful for you and your videos 😊