US MicroStrategy Borrows Another 440 Billion Won to Buy Bitcoin Despite Losses

Corporate Bonds Issued for Bitcoin... "Borrowing to Speculate" Criticism Arises
Stock Price Plummets 63% from Early Year Peak

Michael Saylor, CEO of MicroStrategy

[Asia Economy Reporter Kim Suhwan] MicroStrategy, a U.S. software company expected to incur a loss of 300 billion KRW in the second quarter of this year due to a decline in Bitcoin prices, is issuing corporate bonds worth over 400 billion KRW to buy more Bitcoin.

On the 7th (local time), MicroStrategy announced it would sell $400 million (approximately 440 billion KRW) in senior secured notes for the purpose of investing in Bitcoin, Bloomberg reported.

Bloomberg reported that this is the first case of MicroStrategy issuing 'junk bonds' (high-risk, high-yield bonds issued by companies with low credit ratings) to purchase cryptocurrency.

MicroStrategy currently holds about 92,000 Bitcoins and is known as a 'cryptocurrency whale' company. The company's CEO, Michael Saylor, is famous as an ardent Bitcoin advocate.

MicroStrategy's plan to issue corporate bonds for Bitcoin was announced on the same day a report was released forecasting losses due to the sharp drop in Bitcoin prices. In the digital asset report disclosed by the company that day, it was stated that a loss of $284.5 million (approximately 310 billion KRW) is expected in the second quarter due to the Bitcoin price plunge.

Bloomberg's own analysis indicated that when combined with the Bitcoin losses already accounted for by MicroStrategy, the total loss exceeds $500 million (approximately 550 billion KRW).

Mark Lichtenfeld, chief strategist at investment advisory firm Oxford Club, criticized MicroStrategy's $400 million corporate bonds, saying they are "used for speculation on highly volatile assets rather than corporate acquisitions or company growth."

There are also criticisms that MicroStrategy's plan to buy more Bitcoin is a 'dollar-cost averaging' strategy to reduce losses by purchasing Bitcoin at lower prices to lower the average book purchase price.

Peter Schiff, chairman of Euro Pacific Capital, pointed out, "MicroStrategy's CEO Saylor said he would borrow $400 million to buy Bitcoin to sustain losses," adding, "The company's board needs to stop the crazy Saylor."

Meanwhile, MicroStrategy's stock closed at $469.81 on the New York Stock Exchange that day, down 3.09% from the previous session. This marks a 63% plunge from the peak of $1,272.94 on February 9 of this year.

This content was produced with the assistance of AI translation services.