As the world's largest corporate holder of bitcoin, $MicroStrategy (MSTR.US)$ Driven by the strong rise in bitcoin, the stock price surged by 11.89% to $430.54 per share. Since the presidential election on November 5th, the company's stock price has almost doubled, and it has skyrocketed nearly sixfold since the beginning of the year.

The price of bitcoin reached a new high on Tuesday, briefly surpassing $94,000 and moving towards the $100,000 mark. Since the election, bitcoin has risen approximately 35%, and investors generally believe that Trump's policies are favorable for cryptos.

Based on basic shares outstanding, MicroStrategy's market cap is $96 billion. However, according to the company's latest disclosure of diluted shares outstanding (0.2563 billion shares), its market cap reaches $110 billion, making it one of the largest U.S. companies not yet in the S&P 500 Index.

Investors favor MicroStrategy due to its bold bitcoin sharing strategy and the use of financial leverage.

MicroStrategy announced on Monday night that it will issue $1.75 billion in new convertible bonds at 0% interest. Upon completion of the transaction, the company's total debt will reach approximately $6 billion.

Since October 31st, the company has raised approximately $6.6 billion through stock sales, including $4.6 billion raised from November 11th to 17th, all used to purchase the corresponding amount of bitcoin. As of November 17th, the company holds 331,200 bitcoins, accounting for over 1.5% of the total bitcoin supply of about 20 million.

Investors paid a high premium for MicroStrategy's bitcoin holdings. As of now, the premium on its stocks exceeds three times the market cap of its bitcoin holdings, with the total value of the bitcoin holdings being around $31 billion.

MicroStrategy's Chairman and controlling shareholder, Michael Saylor, proposed the '21-21' global strategy in October, planning to issue $21 billion worth of stocks and an equal amount of bonds over the next three years to purchase bitcoin. Recent equity and bond sales indicate the company is steadily achieving this goal.

Saylor stated during the third quarter earnings call: 'MicroStrategy's global strategy is to embrace volatility, with investment performance outpacing assets in the s&p 500 index. In this environment, we attract more capital to grow stronger, while delivering greater returns to shareholders.'

The company has also introduced the concept of 'bitcoin yield', measuring whether the growth rate of its bitcoin holdings exceeds the growth in the number of outstanding shares.

However, high premiums come with risks. Chief Economist of Europe Pacific Capital, Peter Schiff, questioned this circular strategy on social media: 'The higher the MSTR stock price, the more shares Saylor can sell; the more shares he sells, the more bitcoin he buys; as bitcoin prices rise, MSTR stock prices rise even more. When does this cycle end?'

Currently, investors are paying around $0.3 million per bitcoin for MicroStrategy, far above the current market price of bitcoin. This implies that if the premium shrinks, MicroStrategy's stock performance may lag behind that of bitcoin itself.

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