Famed Investor Bill Miller Explains Buying MicroStrategy Debt: It’s the Bitcoin

Taking part in MicroStrategy’s recent $650m convertible senior note offering was basically getting an almost-free call option on bitcoin, legendary investor Bill Miller said.

• In a Jan. 21 letter to investors, the head of Miller Value Partners explained his decision to take part in the offering but first laid out what bitcoin is and defended it against common criticisms.
• “Bitcoin has been the best performing asset over eight of the past ten calendar years, and its annualized performance has blown away the next-best performer, the Nasdaq, by a factor of ten over the past decade,” Miller wrote.
• “Not owning any Bitcoin has been a massive mistake, and we expect that will continue to be true.” 
• The famed value investor then noted MicroStrategy’s recent $650 million convertible note offering resulted in the only debt the business intelligence firm carries and the amount is half what Miller thinks the company’s worth.
• MicroStrategy, which used the proceeds of the offering to buy more bitcoin, now owns more than $2 billion in the largest cryptocurrency.
• “So, when MicroStrategy issued the bond at par, in our assessment there was very little downside and an almost-free call option on Bitcoin,” Miller wrote.
• Miller also praised MicroStrategy head and bitcoin evangelist Michael Saylor’s “almost unique ability” to catch and scale trends early, while portraying his uneven tenure as CEO as an asset, saying,”He is the only sitting CEO we can find that has thrived after presiding over a 99.86% decline in his company’s equity price.”