I have said that [MicroStrategy] is roughly in the business of (1) owning a big pot of Bitcoins, (2) selling stock at a large premium to the value of its pot of Bitcoins and (3) reinvesting the money in more Bitcoins. This is a weird enough business model. But to be fair MicroStrategy is also in the business of selling billions of dollars of convertible bonds to buy more Bitcoins, which is in many ways a much nicer trade:

in fact MicroStrategy’s stock price is much more volatile than Bitcoin is, so MicroStrategy can sell its volatility at a huge (and deserved) premium to the volatility of Bitcoin Convertible arbitrageurs buy stock when it goes down and sell it when it goes up, which reduces the volatility of the stock. Ordinarily this suggests some limit on a company’s ability to sell convertibles: Convertibles are worth more if your stock is more volatile, but the more convertibles you sell, the less volatile your stock will be, because convertible arbitrageurs will smooth out the moves in your stock by buying when it goes down and selling when it goes up