Bitcoin Is Slumping, but Michael Saylor Says Strategy Can Create $10 Billion to $30 Billion in "Digital Credit"

Resumen detallado

Michael Saylor just floated up to $30 billion in new financing for Strategy. Here's what that number does and doesn't mean.

Michael Saylor used Strategy's (NASDAQ: MSTR) third-quarter earnings call to argue that the company no longer needs the two things that powered its growth for years. Saylor said that the balance sheet could support creating between $10 billion and $30 billion of what he calls "digital credit." He added that this financing move would not require Bitcoin (CRYPTO: BTC) prices to rise or another common-stock sale.

Saylor's timing is notable. Bitcoin traded near $68,500 on Nov. 12, down about 18% over the past month, and Strategy's stock fell roughly 28% over the same period. Both have dropped even deeper over the last year.

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Strategy sorts its financing into three layers. Digital capital is Bitcoin itself. Digital equity is MSTR common stock. Digital credit is perpetual preferred stock. The label is new, but the product is still stock, so the claim covers common shares only. Preferred issuance remains the funding mechanism.

Strategy holds 850,364 Bitcoin as of Nov. 13, worth roughly $63.3 billion at today's prices. That's roughly 4% of the 21 million lifetime cap, or 4.2% of the circulating Bitcoin supply. Saylor reasons that this stockpile gives his company enough collateral weight to support credit-style products regardless of where the Bitcoin market goes. Idle collateral doesn't do much for its owner, and Saylor wants to put his Bitcoin treasury to work instead of waiting for a rally.

The $30 billion figure describes what Strategy could do in theory. It's a possible capacity, not an announced fundraising target, and no issuance date has been set. There's paperwork to do, board meetings to hold, and strategic decisions to make before writing that press release.

Strategy is doing a lot with perpetual preferred stock…

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