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Yahoo
34 minutes ago
- Yahoo
Saylor's New $4.2 Billion Bitcoin Plan Aims to Reassure Skeptics
(Bloomberg) -- Michael Saylor isn't backing down. The Strategy co-founder is preparing to sell $4.2 billion more in preferred stock to fuel his latest Bitcoin bet — while throwing a lifeline to investors worried he's diluting them into oblivion. The World's Data Center Capital Has Residents Surrounded An Abandoned Art-Deco Landmark in Buffalo Awaits Revival We Should All Be Biking Along the Beach Budapest's Most Historic Site Gets a Controversial Rebuild San Francisco in Talks With Vanderbilt for Downtown Campus The plan, unveiled with second-quarter earnings on Thursday, is Saylor's latest answer to the big question hanging over his stock: how long can he keep using a lofty premium to fund ever-larger Bitcoin buys? To reassure shareholders, Strategy pledged it won't issue new common shares at less than 2.5 times its net asset value, except to cover debt interest or preferred dividends. At the same time, Saylor will keep tapping the market 'opportunistically' when the premium is high, turning equity sales into fresh Bitcoin buys. The move does two things at once: it locks in a floor aimed at reassuring any skeptical shareholders and arms the company with a larger war chest to keep buying Bitcoin. It's a double play that pits Saylor directly against hedge fund managers like Jim Chanos, who have been betting the company's premium will collapse. 'That would put common shareholders who are concerned about potential dilution at ease,' said Brian Dobson, managing director for Disruptive Technology Equity Research at the brokerage firm Clear Street. 'The market is reacting positively to Strategy's equity products. The demand is there as evidenced by their substantial capital raises.' It's the latest in a string of financial maneuvers that have transformed a once-obscure software firm into a leveraged Bitcoin proxy. The dual move showcases Saylor's mastery of capital markets during these bullish digital-asset times: using a self-imposed floor to placate critics, while simultaneously arming the company with fresh ammunition to keep buying Bitcoin. The company - which is known formally as MicroStrategy Inc. — has already raised more than $10 billion this year through stock and structured offerings, feeding a balance sheet now holding $74 billion in Bitcoin. Its stock has surged 3,300% since Saylor's first crypto purchase, outpacing Bitcoin itself and forcing hedge funds into a high-stakes battle over whether his premium-fueled strategy can last. Since Strategy's first Bitcoin purchase in 2020, Saylor has sold equity, issued various types of debt and layered stacks of preferred shares on top. In the process, he has encouraged a fleet of imitators and spurred a new industry of public companies following a so-called treasury strategy dedicated to buying and holding cryptocurrencies. Good Times Since Strategy trades so far above the value of its Bitcoin, the company can sell stock at rich levels, buy more Bitcoin, and in turn reinforce that premium. It's a reflexive loop that critics warn would snap if sentiment shifts. For now, Saylor's ability to turn equity markets into a Bitcoin funding engine has made his firm both a proxy for the cryptocurrency and a pressure point for critics betting the spread will collapse. The company reiterated that it registered an unrealized gain of about $14 billion in the second quarter. After factoring in deferred taxes, the Bitcoin treasury company had net income of $10 billion, or $32.60 a share, the firm said in a statement. The eye-catching benefit, first disclosed at the start of the month, was due to a rebound in Bitcoin's price and a recent accounting change. Demand for offerings can fluctuate depending on Bitcoin prices. The firm had to sweeten one of its earlier preferred stock offerings this year with a steep discount to win over price‑sensitive buyers. Just last week the company launched a new kind of preferred stock, dubbed Stretch, that was upsized from $500 million to more than $2 billion. It was yet another move that showed how deftly Saylor can turn financial engineering into crypto firepower. For now at least. 'Strategy's upsize is a huge reflection on the market demand for its Stretch Preferred Stock offering,' said Tyler Evans, co-founder and chief investment officer of UTXO Management. 'They have had similar upsizes from previous preferred stock offerings, but this one is an eye-popping number.' --With assistance from Kirk Ogunrinde. Burning Man Is Burning Through Cash Russia Builds a New Web Around Kremlin's Handpicked Super App Everyone Loves to Hate Wind Power. Scotland Found a Way to Make It Pay Off It's Not Just Tokyo and Kyoto: Tourists Descend on Rural Japan Cage-Free Eggs Are Booming in the US, Despite Cost and Trump's Efforts ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Forbes
an hour ago
- Forbes
Defense Spending Could Protect Your Investment Portfolio
The U.S. defense industry is emerging as one of the most resilient sectors for investors. Amid global instability and rising geopolitical tensions, American policymakers are displaying a unique commitment to military strength. The recent passage of President Trump's 'One Big Beautiful Bill', a sweeping piece of legislation that pushes U.S. defense spending to historic highs, and a newly agreed upon EU – U.S. trade deal underscores this trend. The bill adds $150 billion in new funding to the Department of Defense, bringing total projected spending for the 2026 fiscal year to over $1 trillion. On top of that, the EU has committed to over $600 billion of military equipment procurement in the coming years. The signal to markets is undeniable: defense is a national and global priority. For investors, this presents an opportunity. Massive new capital is now earmarked for shipbuilding, advanced munitions, next-generation aircraft, and a new missile defense system dubbed the 'Golden Dome.' Defense stocks, long considered cyclical or defensive, may now be positioned for long-term structural growth. Interestingly, this surge in spending comes even as U.S. military expenditures, as a share of GDP, sit at multi-decade lows. According to the Stockholm International Peace Research Institute (SIPRI), global defense spending has climbed 37% over the past decade, but America's share of that growth has not kept pace with its expanding economy. In short: U.S. defense spending is climbing fast in absolute terms, but relative to our economic size, there's still plenty of runway ahead. TOPSHOT - An US-made MIM-104 Patriot surface-to-air missile is launched during a live fire exercise at the Chiupeng missile base in Pingtung county on August 20, 2024. (Photo by Sam Yeh / AFP) (Photo by SAM YEH/AFP via Getty Images) AFP via Getty Images Ongoing wars in Europe and the Middle East and intensifying tensions in the Indo-Pacific have forced governments across the globe to rethink their defense postures. In Europe, Russia's continued aggression in Ukraine has led to a dramatic increase in defense budgets across NATO member states. The 2% GDP target for defense spending has given way to a 5%+ target for European members, meaning our allies are finally putting their money where their mouth is – although those expenditures are far from guaranteed. For context, in 2024, the U.S. spent roughly $3,000 per citizen on national defense, more than four times what most European nations spent, according to an article from Barron's . In Europe that number needs to rise meaningfully if they're going to hit their NATO commitments. The Middle East is increasingly unstable. U.S. involvement in ongoing conflicts in the region, including efforts to deter Iran's nuclear program and manage the persistent tensions between Israel and Palestine, continues to highlight the need for advanced missile defense systems, precision munitions, and rapid deployment capabilities. The conflict also highlights the expenses associated with war. Every rocket fired comes with a price tag and restocking munitions is expensive, especially when a conflict is hot and countries can't afford to wait for supplies. The conflict in the Middle East is also indirectly expensive in that it introduces significant volatility into global oil markets. Iran, as a key OPEC member, controls the northern side of the Strait of Hormuz, through which roughly 20% of the world's petroleum supply passes. Any disruption here carries both economic and strategic consequences - further justifying elevated defense spending. Meanwhile, tensions in the Indo-Pacific region continue to build. China's assertiveness around Taiwan and the South China Sea places it in direct competition with U.S. naval and diplomatic interests. The need to prepare for a potential conflict in the region has subtly been called to the forefront via Trump's recent focus on shipbuilding and other maritime industries. U.S. naval power is extremely important if we were to see a real conflict develop here, but we need more ships. The U.S. market share in shipbuilding has plummeted to just 0.13% as of 2023, down from 5% in the 1970s, according to the U.S. Naval Institute. In contrast, China, Japan, and South Korea now account for over 90% of global shipbuilding capacity. As a result, the U.S. is more reliant on allies and commercial partnerships than ever before - a vulnerability that further underscores the need for investment. The international dimension of rising defense spending adds a powerful tailwind for U.S. contractors. In 2024, the U.S. Department of State reported that global arms transfers for the U.S. reached nearly $118 billion, and $97 billion of that was funded directly by U.S. allies and partners. American dominance in foreign military sales is accelerating, not just because of technological superiority, but because of interoperability. As Europe, the Middle East, and Asia expand their defense budgets, they are prioritizing systems that integrate seamlessly with U.S. platforms. Whether it's the F-35 fighter jet or the Patriot missile system, American defense tech is becoming the global standard. This shift has economic implications as well. Defense remains one of the few areas where the U.S. still plays a leading role in high-value manufacturing, a strategic lever in our otherwise service-dominated economy. Arms exports give the U.S. a trade advantage, especially as reducing the trade deficit remains a priority for the Trump administration. The recently finalized EU-U.S. trade deal, which lowered blanket tariffs from 30% to 15%, also includes a pledge of $600 billion in EU military procurement. While the real flow of capital will depend on each country's budget realities, demographics, and political might, the rhetoric alone has been enough to push European defense stocks lower. The market is betting the major U.S. defense contractors, commonly referred to as the primes, will ultimately be the benefactors. Between 2020 and 2024, the U.S. accounted for 43% of all global arms exports, according to the Stockholm International Peace Research Institute. Key buyers include Saudi Arabia, Japan, Australia, and EU nations - many of which are now aiming for defense spending levels of 3–5% of GDP. For major U.S. firms like Lockheed Martin (LMT), Northrop Grumman (NOC), and RTX Corp. (RTX), this means multibillion-dollar order backlogs and increased income diversification. It also acts as a hedge against domestic budget volatility, reinforcing the fact that U.S. contractors don't need to rely solely on Washington to grow. OGDEN, UT - MARCH 15: A F-35 fighter jet take-offs for a training mission at Hill Air Force Base on March 15, 2017 in Ogden, Utah. Hill is the first Air Force base to get combat ready F-35's. They currently have 17 that might be deployed in the fight against terrorism and ISIS in the near future. (Photo by) Getty Images The Autonomous Future of Defense A growing portion of new defense dollars is being directed not just at traditional weaponry, but at artificial intelligence, autonomy, and next-generation battlefield technology. While tanks and missiles still matter, it's AI, drones, and predictive analytics that will define the next phase of military dominance. Companies like Anduril Industries are at the forefront of this transformation. Their autonomous drone systems, battlefield command software, and AI surveillance tools are redefining how militaries perform in combat environments. The basis for all current and future R&D is that the U.S. military needs technology that is mass-producible and entirely replaceable. Unmanned and easily replaceable aircraft are a no-brainer for potential future conflicts. Meanwhile, Palantir Technologies (PLTR) continues to expand its work with the Department of Defense, building decision-intelligence platforms that help military leaders simulate outcomes and deploy resources more efficiently. These capabilities aren't theoretical -they're already being used in logistics, counterterrorism, and battlefield planning across several branches of the U.S. military. The software-first approach is here to stay. Defensive Cybersecurity Beyond the battlefield, the digital domain is just as critical. Companies like Palo Alto Networks (PANW), Fortinet (FTNT), and CrowdStrike (CRWD) are playing crucial roles behind the scenes, working alongside defense contractors to secure U.S. military networks and infrastructure. Their platforms are already being used to detect foreign intrusions, prevent ransomware attacks, and build cyber resilience across key defense systems. As cyberattacks from nation-state actors continue to escalate, the Pentagon is steadily shifting a greater portion of its IT and cybersecurity budget toward these firms, viewing them as essential partners in modern warfare. Tanks, aircraft, and ships are worthless if you can't secure the digital infrastructure required for operations. This photograph hsow the logo of the US big data analytics software company Palantir Technologies during the World Economic Forum (WEF) annual meeting in Davos, on January 23, 2025. (Photo by Fabrice COFFRINI / AFP) (Photo by FABRICE COFFRINI/AFP via Getty Images) AFP via Getty Images And then there's SpaceX. Its Starlink satellite network has become essential for battlefield communications, notably in Ukraine, and its ability to launch defense communications into low-Earth orbit has made the company indispensable to Pentagon strategy. The militarization of space is no longer a sci-fi concept - it's a live and growing budget category. Taken together, these companies represent a shift from defense as a manufacturing industry to one centered around software, autonomy, and connected systems. Investors looking to position themselves for the next decade of military innovation would be wise to watch not only the legacy names - but also the disruptors. Parting Thoughts Ultimately, investing in the defense sector isn't just about capitalizing on geopolitical unrest - it's about understanding the structural realignment of global priorities. Defense is a central pillar of economic, technological, and industrial strategy. New legislation in the U.S. and international military spending commitments signal a paradigm shift. Multiyear visibility into global defense spending is music to the ears of the legacy contractors. Rising players in autonomous systems, cybersecurity, and satellite communications are building out the next generation of military infrastructure. There's lots to be excited about, and investors looking for durable tailwinds in a shifting global order should take a look across the entire defense spectrum.
Yahoo
an hour ago
- Yahoo
SMBC, Fin Capital to invest $300M in US fintechs
This story was originally published on Banking Dive. To receive daily news and insights, subscribe to our free daily Banking Dive newsletter. Japanese banking giant Sumitomo Mitsui Banking Corporation and San Francisco-based asset manager Fin Capital will invest $300 million in U.S.-based fintech startups, the bank said Monday. The initiative, dubbed the SMBC Fin Atlas Beyond Fund, will focus on early-stage start-ups in the banking, payments, wealth management, and artificial intelligence realms. Atlas Beyond will also focus on the CFO technology stack, insurtech, risktech and vertical fintech realms. 'We are committed to investing in innovations tailored to the financial industry, aiming to elevate our banking group's business and foster new ventures within the sector,' according to the fund's website. 'As a bank-backed CVC supporting diverse industries beyond finance, we aspire to drive innovation across various sectors by leveraging cutting-edge technology and data,' the website said. 'We also seek to invest in companies offering specialized solutions in high-demand verticals, where banking expertise is essential.' Atlas Beyond will be run by Eiko Ooka, who is also general manager of SMBC's digital strategy department. Managing Director and Head of SMBC's Asia Innovation Centre Mayoran Rajendra, Fin Capital Managing Partner Logan Allin and Fin Capital General Partner Christian Ostberg join Ooka on Atlas Beyond's investment committee. 'Finally made it! Since moving to New York in 2013, I've been working on VC investments and creating collaboration opportunities between startups and Japanese companies within the U.S. ecosystem, with the vision of establishing a CVC for the SMBC group. We will now further intensify our innovation activities in the U.S.,' Ooka said in a LinkedIn post Monday. It's the first time the bank has focused its venture activities on U.S. startups, SMBC Group wrote on LinkedIn. Atlas Beyond will work closely with SMBC Americas and other SMBC Group subsidiaries to build relationships with startups, entrepreneurs, investors, and universities across the U.S., according to SMBC's press release. SMBC launched a similar fund in 2023 to support Asia-based fintech startups, dubbed the Asia Rising fund, alongside Tokyo, Japan-based venture firm Incubate Fund. Asia Rising has since invested in six firms, including Vayana, a Pune, India-based trade credit infrastructure platform which processes over $1 billion in financing monthly; and Jakarta, Indonesia-based invoicing and payment platform The bank did not provide a comment beyond the press release. Recommended Reading Cash management firm Dragonfly dives into 'composable' banking Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
