It's a truism on the stock market that no investor should ever put their eggs in one basket -- asset diversification is crucial. Yet there are some mavericks who defy that piece of conventional wisdom, and one striking example is MicroStrategy (MSTR +6.56%) Co-Founder and Chairman Michael Saylor.
Saylor is known as being quite the enthusiastic bull, so much so that he has geared his company exclusively toward the buying and holding of Bitcoin (BTC +2.93%). These days, that's a lucrative strategy; according to data compiled by S&P Global Market Intelligence, MicroStrategy stock was up a lively 25% in trading this week.
The Bitcoin believer
When you're a fervent believer in a single asset, it's easy to develop a straightforward approach to your business. For years now, MicroStrategy's overarching goal has been always to buy more Bitcoin.
To that end, it made a big purchase on Monday just after closing an $800 million issue of convertible senior notes, which mature in 2030 (if not converted) and were sold to an unspecified number of institutional buyers.
The company wasted little time loading up on more Bitcoin, acquiring 12,000 of the popular cryptocurrency at a price of around $72,000 apiece. Since the rough math on those figures comes out to $864 million, it's apparent much of this came from the notes issue.
Hardly taking a breath to slow down, on Wednesday MicroStrategy announced another flotation of convertible notes. These are due in 2031 if not converted, and the size of this issue is a comparatively modest $500 million. In what came as a surprise to no one, MicroStrategy said the funds are to be used to buy more Bitcoin and for "general corporate purposes."
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Key Data Points
Going along for the ride
The rest of the investing world has lately been on a MicroStrategy-like quest to snap up as much Bitcoin as possible. Fueled by favorable economic developments and the stampeding popularity of spot Bitcoin exchange-traded funds (ETFs), the cryptocurrency has recently set new price records. It's no wonder investors are so bullish on MicroStrategy too.
