MicroStrategy's new bitcoin metric
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Michael Saylor, chairman and cofounder of MicroStrategy, rolled out a new metric the company's adopting, saying it will help investors better understand its bitcoin strategy.
Why it matters: The enterprise software firm turned itself into a bitcoin proxy stock when it started accumulating bitcoin in the summer of 2020, tapping equity, debt or hybrid issuances to fund its purchases.
- Its stockpile now: 226,500 BTC deep.
Yes, but: The launch of spot bitcoin ETFs has made such proxy plays look less like a selling point, or so detractors say.
Enter BTC Yield, the new metric MicroStrategy unveiled yesterday in second-quarter earnings.
- The math is just bitcoin holdings divided by the company's diluted shares outstanding, which would include any additional shares that could result from things like converting convertible notes and exercised stock options.
Between the lines: Through the first seven months of 2024, MicroStrategy's BTC Yield was 12%.
- The company is targeting a yield of 4% to 8% in each of the next three years.
What we're watching: That yield stands to move, with MicroStrategy management saying yesterday that it plans to lean into equity issuances as the main means of buying more bitcoin.
- Yesterday it also announced a registration statement for a $2 billion at-the-market equity offering — that could boost the yield depending on at what price the company sells new shares as well as the price of bitcoin.
