Michael Saylor

Actually, they still do. We borrowed a billion dollars two months ago at 82 basis points. And so the way it works is we're selling convertible bonds. And the convertible bonds have a bond component, and then they have an option component, like a call option. And so the convertible arbitrageurs and the options traders, they like the volatility in the stock.

You know, one thing you might not know is we have the most volatile stock in the S&P 500. So if you took all 500 stocks in the S&P 500, you said, which is the most volatile? We're like 100 vol. The S&P, the VIX is like 15. Most of the MAG7 stocks, they would be like 20, 25 vol. Bitcoin is 50. So it's like three to four times the volatility of the S&P index. MicroStrategy, we lever the Bitcoin.

You know, one thing you might not know is we have the most volatile stock in the S&P 500. So if you took all 500 stocks in the S&P 500, you said, which is the most volatile? We're like 100 vol. The S&P, the VIX is like 15. Most of the MAG7 stocks, they would be like 20, 25 vol. Bitcoin is 50. So it's like three to four times the volatility of the S&P index. MicroStrategy, we lever the Bitcoin.

So we get 2X that. So we get to 100. And conventional investors are afraid of volatility. They fear it. They're like, I can't handle the volatility. But volatility is like RPM in an engine. It's like spinning at 100 RPM instead of 10 RPM. So if you plug volatility in the Black-Scholes equation, the options are a lot more valuable if you have volatility.

So we get 2X that. So we get to 100. And conventional investors are afraid of volatility. They fear it. They're like, I can't handle the volatility. But volatility is like RPM in an engine. It's like spinning at 100 RPM instead of 10 RPM. So if you plug volatility in the Black-Scholes equation, the options are a lot more valuable if you have volatility.

So when I'm selling a convertible bond, it's got an option attached to it. So if you're an investor, you want to buy a convertible bond from a company with large volatility, large liquidity, and durability. You want to know the company's going to keep going. But if you think about liquidity, that's like energy. So maybe I spend that little Merry Christmas hat at 50 RPM.

So when I'm selling a convertible bond, it's got an option attached to it. So if you're an investor, you want to buy a convertible bond from a company with large volatility, large liquidity, and durability. You want to know the company's going to keep going. But if you think about liquidity, that's like energy. So maybe I spend that little Merry Christmas hat at 50 RPM.

It's a little kid's toy or a little balsa wood propeller on your kid's toy. But if I take a baseball bat and I spin it at 100 RPM, it's a weapon. But if I take a 20-ton flywheel and I spin it 100 RPM, it's a turbine. Like I can move a ship. And so we have, well, now we have $30 billion worth of capital. And when we're spending it at 100 vol, That's a huge opportunity for options traders.

It's a little kid's toy or a little balsa wood propeller on your kid's toy. But if I take a baseball bat and I spin it at 100 RPM, it's a weapon. But if I take a 20-ton flywheel and I spin it 100 RPM, it's a turbine. Like I can move a ship. And so we have, well, now we have $30 billion worth of capital. And when we're spending it at 100 vol, That's a huge opportunity for options traders.

So there's a massive options market, a massive amount of liquidity, a massive amount of volatility. And so the convertible arbitrage guys, let me say it differently. If you have 100 vol, you can generate 100% interest just by selling the upside. So people, there are funds like MSTY, all they do is just sell the calls. They just sell the volatility and they generate like 180% dividend yield.

So there's a massive options market, a massive amount of liquidity, a massive amount of volatility. And so the convertible arbitrage guys, let me say it differently. If you have 100 vol, you can generate 100% interest just by selling the upside. So people, there are funds like MSTY, all they do is just sell the calls. They just sell the volatility and they generate like 180% dividend yield.

So who loans us the money? People that want that volatility because the volatility is worth a lot more than getting paid 12% interest.

So who loans us the money? People that want that volatility because the volatility is worth a lot more than getting paid 12% interest.

So who is giving you the money? Who's it coming from? What does a typical investor look like?

So who is giving you the money? Who's it coming from? What does a typical investor look like?

Well, it depends. For the equity, it's Bitcoin maximalists, people that believe in Bitcoin that want to outperform Bitcoin. It's also institutional investors that like Bitcoin, but they can't buy Bitcoin because of their charter. They can only buy an operating company. Many investors have large pools of capital, and they're not allowed to buy the commodity. They have to buy a company.

Well, it depends. For the equity, it's Bitcoin maximalists, people that believe in Bitcoin that want to outperform Bitcoin. It's also institutional investors that like Bitcoin, but they can't buy Bitcoin because of their charter. They can only buy an operating company. Many investors have large pools of capital, and they're not allowed to buy the commodity. They have to buy a company.

So the question when a lot of people ask and say, why would you give your money to MicroStrategy to invest? Why not just go do it yourself and buy Bitcoin? This is because some can't do that, right?

So the question when a lot of people ask and say, why would you give your money to MicroStrategy to invest? Why not just go do it yourself and buy Bitcoin? This is because some can't do that, right?

Well, there's a lot of answers to that. One is, can you borrow a billion dollars for free for five years with no recourse and unsecured? Probably not, right? Individuals can't borrow money for free for long periods of time. It's difficult. Companies can. So one reason why is because we can borrow $4.2 billion unsecured for a long period of time and pay less than 1% interest.