🧠 What Saylor is getting at: "Mindboggling strategy"
Saylor: "We sold $1.5B of stock backed by $500M of BTC. We bought back $1.5B of Bitcoin, capturing a Billion dollar gain in the arbitrage."
let me elaborate.............
🔁 MicroStrategy's Arbitrage Process (Step-by-Step)
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Stock Issuance:
MicroStrategy issues $1.5 billion worth of new stock.
Investors buy the stock, partly because they believe in MicroStrategy's Bitcoin strategy (often trading at a premium to its book value or actual BTC holdings).
Backing with Bitcoin (Narrative):
Saylor says it was "backed by $500M of BTC" — meaning MicroStrategy may have referenced its existing BTC as a justification for investor interest (though not literally collateral).
Capital Raised > BTC Value:
The $1.5B raised is 3x the $500M in BTC it “backed” — this is the arbitrage: investors paid a premium price (via stock) relative to the BTC value.
Reinvestment into Bitcoin:
MicroStrategy uses the $1.5B from the stock sale to buy more BTC.
End Result:
They effectively increased their Bitcoin holdings by $1.5B using capital raised from stock that the market valued far above the $500M worth of Bitcoin it was notionally tied to.
Gain: $1.5B BTC bought – $500M "backing" = $1B net BTC exposure gain, with no debt taken on.
