$MicroStrategy (MSTR.US)$ The CEO responds to the short selling: the company currently makes a daily profit of 0.5 billion dollars, and expects the stock price to increase by 60% each year over the next 20 years.

During last Thursday's regular trading hours in the US stock market, the well-known short-selling institution, Citron Research, posted on the social platform X, announcing its intention to short sell 'bitcoin holding giant' MicroStrategy (MSTR). MicroStrategy's stock price plummeted in response, falling more than 21% from its daily high.

On Friday, MicroStrategy's executive director, Michael Saylor, appeared on CNBC's media program and responded by stating that while the company profits from volatile trading, they also leverage through ATM operations. Therefore, as long as bitcoin continues to rise, the company can still make money.

ATM refers to issuing or increasing shares at market price, which means that a publicly listed company gradually sells newly issued shares or the shares it already owns into the secondary trading market at current market prices through designated brokers.

The majority of MSTR's premium comes from the ATM mechanism.

Previously released tweets indicate that Citron believes MicroStrategy's stocks have become an alternative investment to bitcoin, with its stock price showing an unreasonable premium compared to the underlying value of bitcoin. The trading has become significantly overheated, leading to the decision to short sell MicroStrategy.

Michael Saylor stated in this interview that while bearish institutions believe that once the premium and shares disappear, the source of profit also disappears, short sellers are overlooking an important profit point for MicroStrategy: the company obtains high returns by leveraging financing to invest in bitcoin.

Saylor explained that the company relies on bitcoin as a 'reactor' to provide power, profiting on one hand through volatility trading, and on the other hand by issuing bonds to finance additional positions, borrowing to invest in bitcoin through an ATM mechanism.

It is reported that the ATM model can provide flexible financing, avoiding the significant discount issuances typically seen in traditional financing, especially suitable for high-volatility stocks like MicroStrategy. At the same time, MicroStrategy's high trading volume enables large-scale stock sales, with the stock market cap having a 2.8 times premium relative to the amount of bitcoin held, creating arbitrage opportunities in financing.

Saylor stated that through ATM operations, MicroStrategy shifts the volatility, risk, and performance of fixed income assets onto common stocks, allowing the company to achieve returns significantly higher than the cost of borrowing and the increase in bitcoin price.

"If we invest borrowed funds at 6% interest in bitcoin, when the price of bitcoin rises by 30%, what we actually gain is an 80% bitcoin price difference (a function of the combined stock premium, conversion premium, and bitcoin premium)."

"The company issued $3 billion in convertible bonds, calculated at an 80% bitcoin price difference, this $3 billion investment can bring $125 per share in earnings over 10 years."

This means that as long as the price of bitcoin continues to rise, the company can continue to profit:

"Two weeks ago, we conducted an ATM of $4.6 billion with trading at a 70% price difference, which means we made $3 billion in bitcoin within five days. That's approximately $12.5 per share. If projected for 10 years, the earnings will reach $33.6 billion, equivalent to about $150 per share."

When talking about the risks of Bitcoin's decline, Saylor believes that investors who buy MicroStrategy's stocks are already implicitly accepting the risk of Bitcoin's potential decline - if you want a 2x return, you must take on the corresponding risks.

Saylor further stated that the company currently earns $0.5 billion per day and has become the 'fastest growing, most profitable company in the USA,' expecting Bitcoin's price to rise by 29% annually over the next 20 years, with the company's stock price increasing by 60% each year.

Since the beginning of this year, microstrategy's stock price has soared by 516%, nearly four times the 132% increase of bitcoin during the same period, whereas leading AI stocks have increased by 195%.$NVIDIA (NVDA.US)$This year, it has accumulated an increase of 195%.

Editor/Rocky