Essentially, MicroStrategy’s stock often rises more than Bitcoin itself. Taking advantage of this, Michael Saylor sells new stocks at a massive premium and uses the proceeds to buy even more Bitcoin.
This approach leads to dilution for shareholders, which might sound concerning at first. However, the Bitcoin per share also increases as a result. This causes the company’s valuation to rise, which in turn pushes the stock price higher. Then, with the stock price up, Saylor repeats the cycle—issuing more debt or new shares to buy more Bitcoin.
And the process continues: Bitcoin per share increases, the valuation rises, the stock price climbs, and the cycle starts again. It’s an endless loop fueled by Bitcoin’s potential growth, creating this unique feedback loop for MicroStrategy’s shares.
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