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JULIE HYMAN: But Michael, I guess, what I'm trying to understand is, so if I think of it as digital property, and I think of analogies, I think of a real estate company that buys property and holds on to other kinds of property, they may not be the apex, but whatever kinds of property. I think of an asset manager that buys all kinds of different assets. Eventually, they sell those assets in order to make profits.

But I don't think that is your endgame, right? You're not planning to sell the Bitcoin at any point. So what is the purpose of it over time?

MICHAEL SAYLOR: Well, let's keep in mind the fundamental principle. What's the use case of Bitcoin? Its capital preservation.

So if you have a billion dollars, and you live in South America, or you live in Asia, or you live in Africa, and you want the capital to last for hundreds years, you're not going to want to buy $1 billion company, or $1 billion building, or $1 billion of land in any place in Africa. You're going to have to find some other form of property that you can hold for a long period of time.

Let's take New York City. Developers of New York City in 1776 didn't have an end game. They've been raising capital to invest in New York City real estate at the all-time high for 300 years.

If you went and talked to them today, and you said what's your end game, they would say, well, we're going to keep investing in New York City. If you've ever talked to a person that owned an apartment in New York City, no one aspires to hold the apartment for a few years, sell the apartment, and move out of New York City.

They put it in their will. They give it to their children. And if you ask them, why? They say there's no better place on Earth to live than New York. There is no place up from there.

So New York City is the end game for people that want to live in the greatest city in North America. Bitcoin is the end game for anybody that wants to own the greatest property in the 21st century.

JULIE HYMAN: Well, I guess, that is the case. But is there a price at which you would consider selling some of the Bitcoin pulling out? I mean, because you can do something with New York City.

You can live in New York City. You can have a business in New York City. You know, what do you do with the Bitcoin besides it just gather value?

MICHAEL SAYLOR: Well, the real estate developers in New York City, they're not buying the real estate because they want to live in it. They're buying the real estate because they expect--

JULIE HYMAN: Well, because they want to sell it eventually, Michael. I mean, let's be honest, most of the people who are-- yes, sure some people pass it on to their children. But like most of the people who are buying assets at some point want to sell the assets at a profit.

MICHAEL SAYLOR: Let me say it a different way. People that use Fiat currency as a store of value, there's a name for them. We call them poor. OK.

Anybody that's rich in the world, they own property. They own-- they own large swathes of land. The royal family of England, it didn't sell all of its property in Central London in order to buy currency or paper money.

Nor did the Royal family of Japan. Nor did the Royal family in the Middle East. In fact, they want to own the property forever.

I want you to imagine Bitcoin is it's a city in cyberspace that 276 blocks wide, 276 blocks high, 276 blocks deep. About 21 million blocks. Now, imagine, all 8 billion people in the world want to live there one day. They want to put their capital there.

There's $900 trillion of wealth in the world. As people migrate from every other form of property, and they've assets into cyberspace, you're going to see the Bitcoin network go from $1 trillion network to a 10x that to a 100x that. And there really is nowhere else to go. It is the apex property of the human race.

JULIE HYMAN: So, at some point, as the value of the Bitcoin on MicroStrategy's balance sheet grows, both because it's growing in absolute terms, and maybe you're adding more to it, do you at some point down the line see being able to use it to transact, to invest in the business, to pay out a special dividend to investors, to buy other businesses?

MICHAEL SAYLOR: We believe that the highest best use of capital is to buy Bitcoin and hold the Bitcoin. The Bitcoin is going to appreciate in value faster than the S&P index. It's going to appreciate in value faster than commercial real estate.

And so there's no point in selling the winner to buy the losers. And Bitcoin is the winner. And so we're just going to keep acquiring Bitcoin with our cash flows, with equity, or capital raises. Any other accretive method that comes to mind.

JULIE HYMAN: Something else I've noticed is I've talked to different investors, different analysts is that, MicroStrategy is actually trading at a pretty steep premium to Bitcoin itself according to one analysis that I saw today as much as 90% to 100% premium to Bitcoin. Is that justified? And why do you think it's justified?

MICHAEL SAYLOR: Right now, an institutional investor that wants to buy Bitcoin has a choice of investing in the ETFs of which BlackRock and Fidelity and are very well-known, or investing in some other company that has a Bitcoin strategy like MicroStrategy. You could think of the ETFs Like ocean going container ships. They can carry huge amounts of capital.

You can invest $1 billion a day in the BlackRock ETF. So they could take on hundreds of billions of dollars of capital. They're not going to trade at a premium.

But what they don't have is performance and leverage. MicroStrategy is different. Because our capital isn't-- you can't redeem our shares. So it's possible for our shares to trade at a premium.

We're an operating company. And that means when our shares trade at a premium, we can either raise capital through convertible debt or through equity. When we do that, we're doing it at a premium to the underlying assets.

That captures an accretion for our underlying shareholders. So following a debt deal where we swap the debt for Bitcoin, our common stock shareholders have more Bitcoin per share than they did before the deal. So another way to say that is if you want to pay 25 basis points, and be 1 to 1 levered, then you would buy the ETF.

But if you actually want to generate an accretion, or a yield, and not pay the fee, and have leverage, then you would buy a stock like MicroStrategy. You could think of us as like we're like air freight, we're Federal Express. We can take you faster, but we're never going to carry the same amount of capital in our payload as a supertanker, or a container ship.

So there's place for both of those strategies. And, in fact, they're very complementary. I think the ETFs benefit from the existence of companies like MicroStrategy. And MicroStrategy benefits from the existence of the ETFs.

JULIE HYMAN: Yeah, certainly, we've seen an uptick in adoption with the introduction of those ETFs. You mentioned the convertible offering. I am curious because it's not the only offering you've done.

Of course, you've done others as a way of investing in more Bitcoin. What happens if the price goes down again? Precipitously, what happens to the capital structure of MicroStrategy?

MICHAEL SAYLOR: Well, you can see, if you look at our past, there have been periods during the crypto winter when Bitcoin went from 66,000 all the way down to 16,000. In that case, we simply hold the Bitcoin. Instead of being 20% levered, we become 40% or 60% levered.

And the way that we raise the capital is using convertible debt. And so the convertible debt is unsecured instrument. It's not marked to market. It doesn't come due, except in four or five or six years from the point that we issued it. And it's not secured against any other kind of capital.

So we don't have to actually do anything. We just wait for the market to recover. And that's what we did in '22. And in '23, we recovered and our shareholders benefited from the deleveraging as Bitcoin rallied in the other direction.