MSTR

Hfksnfgitndskfjridnf

Yup. Once STRC hits a year from IPO I’m gonna go back and see how much they had to dilute to pay a years worth of divs. Last I checked they’ve already given back over 10% of the BTC yield they initially claimed and that was a couple months ago. It’ll probably be close to 20% at the 1 year. Which means it’s almost certain that MSTR shareholders would have been better off if they never had the IPO.

Less-Information-256

You’re right. As you said, it’s just a coincidence that there’s a 3% drop in bitcoin shortly after Saylor (the biggest bitcoin buyer in the market) announced they’d sold. A news story that’s all over every finance media outlet all over the questioning the legitimacy of their business model, bitcoin and the impact of the shift on the price. Including on the literal TV news where your Bitcoin buying uncle gets his finance information from. An announcement that has cause a large drop in the stock price of MSTR and a huge drop in their main method of buying (STRC) signalling to anyone with half a brain that they will have less firepower to buy bitcoin (meaning it’s expected future and therefore actual current value are less). Instead it’s a random drop on a green stock day with no significant (in the current climate) geopolitical or economic news. Sure thing, my guy.

Hfksnfgitndskfjridnf

Feb and March are pretty clear in that they sold MSTR to pay the STRC div. They owed 30 million a month for those divs and their capital raises were 30 million higher than the BTC they purchased. You are correct for April and May though, I don’t see anything for May indicating MSTR sales and April is hard to tell since they split the period up between end of March and start of April. It’s kinda wild how quickly the STRC divs ramped. They were 30 million a month in February of this year and are already at 100 million now.

Caspica

The ones you're calling "paper handed bitches" were the ones that created the 10 years of gains as well... Money needs to change hands. It's possible that BTC can consolidate and recover, but it could also be a sign of lenders being more concerned about the asset. If you sincerely believe in BTC then yeah, they're paper handed bitches, but those who lent MSTR money want either a stable, liquid asset or short term gains. The BTC hasn't delivered either of those which would make them nervous.

baIIern

30k would be crazy. But very much possible if MSTR goes belly up...

Hitachi22

The MSTR ship is sinking. His STRC ponzi might not even make it back to $100 this month and they are going to be forced to sell more Bitcoin. 

Wheaties4brkfst

Nope. Completely incorrect. Old investors in OpenAI can get paid out when OpenAI pays them dividends or buys back their shares. Owners on profitable companies don’t “need” the market in order to get a positive return. MSTR, on the other hand, promised for years that they would never sell bitcoin. Since the actual business loses money, the only way for old investors to get paid would be if new investors came in and bought new stock or preferreds. In other words, if the market did not exist, there would be no way for old investors to make a return. MSTR has now demonstrated that they are willing to sell bitcoin, meaning they have a way to pay old investors without new ones coming in.

azdcaz

Because Ponzi’s don’t retain any real value, but MSTR has billions of dollars of liquid assets on their balance sheet that makes it inherently not a Ponzi. Might was to brush up on what a Ponzi scheme is.

Caspica

>Ponzi schemes are when investors are paid off by investments from different investors. The idea being that you simply pay off old investors to keep up the act that you're investment company is making profits when it isn't. You're right that this is probably not a Ponzi scheme, although the definitional difference between speculation and Ponzi schemes can be hard to know beforehand. That doesn't mean that MSTR and BTC isn't a huge bubble driven by speculation. 

commandrix

Yeah, sure. Even MSTR can't escape the fact that businesses have overhead costs.

Independent-Bee-8397

MSTR sold a few of their BTC and everyone is panicking. So lean back and quit the noise.

lonnie123

People can choose to lend them money with the understood risk that they could lose it. If I buy shares of the SP500 and it goes down, I lose money. If I buy shares of MSTR and BTC goes down, I lose money I have no idea why anyone would lend saylor money because all he does is buy BTC with it, it they do

Hfksnfgitndskfjridnf

Yes, and one of the clueless people is you. They don’t sell convertible bonds anymore. They certainly aren’t selling 40 Billion worth. Their current plan is to sell a ton of preferred stock instead, but it’s looking like that might not happen either given how the share price of STRC is going. You’ll notice a pattern with MSTR. They raise a lot of capital one way, declare that this is the future of capital raising, and then a few months later they aren’t able to capital raise that way anymore so they switch to something else. I’m guessing by the end of the year they give up trying to raise capital through STRC en.

HSuke

Then they will need to replenish it by selling more BTC or MSTR. Or get lucky on the next round of STRC ATMs mid-June. Not the end of the world, but I wouldn't be surprised if there's another 10-20% dip in BTC price if they run out. Most likely, they are already planning to sell more MSTR in 2 weeks so that they don't run out.

BTC_MYTH44

MSTR sold 32 BTC today

satoshisfeverdream

They HAVE to be willing to sell the necessary assets and even demonstrate it in this case. The SEC wants to know if shit hits the fan and MSTR has financial stress that they WILL sell btc to satisfy their shareholder obligations.

HSuke

If you look at past filings (e.g. ones on Apr 1 and May 1), there is no mention of MSTR sales. It just comes from their cash reserves. This is the first time we've seen a strong cause-and-effect relation between the 2. Though I suppose you'd still be correct in the sense that the cash reserves originally mostly came from past MSTR sales and convertible bond sales.

antaran

Saylor is selling MSTR stock, not BTC.

Wheaties4brkfst

Up until today, MSTR was a ponzi because the only way to pay old investors was via new investors. Now that they actually are going to sell bitcoin, they have graduated to hedge fund. Doesn’t make it a good investment but it can at least survive without new investors coming in.

TastyTaco217

Fuck me it doesn’t read well does it? Moron promised the world, hijacked an asset and sold an overly bullish story, just to end up being the reason for it outperforming. If I were a hedge fund, I’d be shorting BTC and MSTR in the hope of triggering a nasty cascade.

Mooks79

This is the most hilarious comment: calling someone “regarded” while demonstrating a complete lack of understanding how markets function. The 32 BTC didn’t tank the price by 3%, all the other people panic selling over MSTR selling did. Market sentiment matters, Albert.

origami_bluebird

Tax fraud AND charged with investment fraud back during the dotcom bubble for cooking the books running the same company. Saylor is a white collar criminal and somehow this community decided yeah let's trust THIS GUY with being the #1 custodian of this bizarre fugazi. Outside of Tether fake printing $100 billion in USDT "liquidity" and brokers like Coinbase locking accounts and stopping sales during volatility, the billions that MSTR has injected into the BTC market is largely why this entire ponzi of crypto hasn't collapsed yet. Please let this shit company fraud die and leave the SP500 as quick as Enron.

Relentlessbetz

Oh no...... Anyways I'm still waiting to see where BTC will bottom by September or October. I will continue buying some STRC and MSTR shares but my real play would be to buy some good LEAPS that are 2 years out.

jekpopulous2

Of course not...but MSTR selling any at all caused whales to panic sell. Take a look at Whale Alerts. Hundreds of billions of dollars in BTC have been dumped on exchanges since MSTR sold.

PATIENCEDDNOTGREDDY

Time to dump MSTR and buy BMNR. 🙌

Anzu_Yamasaki

MSTR dumping

CryptoAnarchyst

He had to. To demonstrate to the SEC that STRC is being defended and funds are protected. People who think this is bearish are idiots. He sold it at a profit, sold it at higher than market price, and he showed that the corporate treasury mechanism works without imploding the price of the stock or the long term value of the business. MSTR is up while Bitcoin is down... that should tell you plenty!

filip1299

[MicroStrategy (MSTR) Will Never Sell Its Bitcoin (BTC) Says CEO - Bloomberg](https://www.bloomberg.com/news/articles/2022-01-19/bitcoin-hodler-saylor-says-microstrategy-will-never-sell-stash) Don't have subscription though.

Jimbob404error

MSTR sold 32 coins

user_name_checks_out

That is the first time that you actually responded to the point being made. A quick search returns multiple headlines to the effect that "MSTR breaks from its 'never sell' Bitcoin strategy". Saylor's repeated mantra, "never sell your bitcoin", was widely understood to apply just as much to Strategy. > Can you see why a company might have different motivations than an individual? Don't patronize me. Yes, I understand that Saylor's motivations could differ from Strategy's. Again, that is beside the point. Strategy's motivations are irrelevant. The point is that they are selling bitcoin after having promised never to do so.

Competitive_Sky_4513

Newbie in MSTR town, so apologies in advance. But, can someone please explain why so much of hate for the guy and company? They are kinda creating and maintaining demand for BTC. Isn’t it good for the BTC ecosystem?

Sea-Orchid-7905

Exacto el tipo decía que vendas un diente y compres BTC y que no lo debías vender nunca. Un charlatán de primera jajaja pero el foro MSTR está lleno de tipo fiele similar a una SECTA.

Personal-Ebb-4717

MSTR, the biggest buyer of BC, can no longer buy BC. STRC has been below Par since dividend. There is no other gimmick Saylor has to raise capital. All the money goes to AI stock. Which is why BC went from 75k to 71k, and will soon hit 60k.

HSuke

So here's the part that should be more concerning to MSTR shareholders. If we look at [today's 8-K](https://www.strategy.com/financial-documents) filing, they sold $2.3M BTC and $128M MSTR to pay a month's worth of STRC dividends. This amount of BTC selling only covered 69% of a single day of STRC dividends. Nice, but not enough. The vast majority of it came from selling MSTR. Usually this amount comes from cash reserves, but they sold off 2/3 of their cash reserves to pay off one of their convertible debt obligations last week, so they're low on cash.

HSuke

Yep. That checks out. 32 BTC is $2.3M They have $10.3B STRC, which pays $99M STRC monthly dividend ($3.3M daily) They paid 69% of a daily dividend, which is Nice, but far from what's needed to sustain STRC. The rest of this month's dividends came from selling $128M of MSTR.

mikitu

Should have done it along time ago. Never selling signals the market to short the stock to death. Strategy continues to be a net buyer, but it now shorting MSTR is a bit more dangerous.

stock-prince-WK

Yea he clearly bought way too high and they will never admit it Saylor and MSTR team are doing the same thing every ‘normal folk’ does when realizing you could have taken all the money you bought in at the top and bought at lower levels for way more It’s a daunting feeling 🤭😩😭

Secret_Servant

It doesn't matter what MSTR does. 

Local_Math_5512

I'm probably in a minority, but I used to feel that way until Strategy (MSTR) started this new preferred Share issuance strategy with STRC, STRF, STRD, etc... A lot of people in this sub talk bad about issuing preferred because it requires paying dividends. I'm of the opposite opinion. To me, the only reason a person would invest in MSTR instead of IBIT or instead of buying BTC directly would be the belief that a corporate treasury company could acquire more BTC per dollar (or share) than an individual could on their own. I could never understand this before because MSTR would dilute shares of MSTR to acquire BTC. This left individual investors in MSTR holding essentially the same amount of BTC per share. Equity didn't grow. In other words, stock dilution of MSTR wasn't accretive for shareholders. Preferred Share issuance through STRC, in my opinion, changes the equation though. Now Strategy can sell preferred shares to buy BTC without diluting shareholders of MSTR. If Strategy is responsible with their Cash Balance, then this preferred issuance strategy should finally allow Strategy to grow more BTC per share of MSTR. In other words, $71K would buy you 1 bitcoin today or it would buy you roughly 476 share of MSTR. If you buy 1 BTC and hold then you'll still only have 1 BTC 10 years from today. If you invest in MSTR and they succeed in growing BTC per share, then your equity value in BTC might be worth far more than 1 BTC over ten years. This all assumes BTC goes up in value though. I'm more bullish on MSTR than I was in the past though. I don't see this sell off as a bad thing. 476 shares of MSTR equals 1 BTC today. If strategy manages equity well then 476 shares of MSTR would be worth far more than 1 BTC 10 years from now.

cH3x

All else being equal*, 1 BTC = 1 BTC, whereas BTC per share of MSTR might be 0.0022 now and 0.0025 a year from now. So people might buy MSTR for the BTC earnings. *That's a huge assumption--realistically one must factor in the premium in the price of MSTR over it's underlying BTC assets and obligations.

waitmarks

That still doesn't make MSTR a viable alternative since they have changed the way they fund their bitcoin purchases. Previously they were issuing convertible bonds to buy bitcoin, so it was essentially a leveraged bitcoin ETF wrapped up in a shitty software company. Now however, they are issuing dividend yielding preferred shares, meaning every quarter they need cash to pay those dividends. Since their software business doesnt make money, they only have 2 options to pay those dividends. Sell bitcoin or sell MSTR shares and dilute. Both are bad for you if you are looking for bitcoin exposure.

clintstorres

Then they are going to say, Bitcoin only needs to go up 2% a year to maintain dividends for ever! Which is true if Bitcoin didn’t have any volatility because if Bitcoin crashes to whatever 50k or whatever then. MSTR has to sell even more bitcoin to cover the dividends. Then even if it goes back up, their stack is less so they get less gains. Rinse and repeat a few times and it’s game over.

DueDilligenceTrader

He sold like 0.00004% of MSTR’s BTC holdings. Nice headline for the news websites and content creators, but pretty meaningless in the grand scheme of things.

HSuke

I think you math errored somewhere. They sold $128M of MSTR and BTC. Monthly dividend is $98M. It's just enough to pay for 1 month of dividends .

EricoS1970

Exactly, before there was an excuse to own MSTR if you couldn't hold BTC in your accounts. Now what is the point ? Especially when he introduced "digital credit."

Medium_Change4574

The beauty of his ponzi (in his POV) is that mostly retail fuels it, he can always issue and further dilute MSTR or stop paying dividends on STRC, leaving retail with their asses STRCed

devCheckingIn

STRC will probably be the unwind of the MSTR ponzi scheme (and BTC as well). You can't promise 11.5% dividends when you have no income. 🤦‍♂️

Informal-Chocolate97

He never wore orange well did he? Maybe it's the constant scowl he has... Anyways I'll glad I still have my MSTR puts .

Newbie123plzhelp

Yeah that's a real bad sign if it's not just some accounting reason for selling. But the whole MSTR has been over its skis for a while.

CriticalTrading

So MSTR breaks a 30 year celibacy vow to cash-out $2.5M? So they don't even have $2.5M in cash to pay dividends?

dripmaster6

Usually, because you can put it in a tax-free stocks and shares account, in my country, they removed any Bitcoin-related investments from brokers that allow you to hold it in that account, so you owe taxes. The workaround is MSTR, which tracks BTC and is avaliable tax free.

RussellUresti

I don't have a link, but they released a bunch of preferred shares to raise money to buy bitcoin (STRC, STRK, STRF, and STRD). But those preferred shares come with dividends that need to be paid to shareholders. They don't make enough revenue from their core business to pay the dividends, so they typically just continually released and sold new shares to pay the dividends; this is why a lot of people consider it a ponzi scheme. In theory, they didn't NEED to sell bitcoin right now. They have enough cash reserves to fund these debt obligations for at least another year. But they made the decision to sell some bitcoin instead of issuing new shares to bolster their cash reserves and pay the dividends. For MSTR, the decision to issue preferred shares to raise cash to buy bitcoin may end up hurting them as it created debt that requires monthly payments to shareholders. They can't just buy and hold bitcoin forever, now - they need to generate revenue to pay those shareholders. When bitcoin is up, they can issue new shares to cover the debt; but when bitcoin is down, they'll have to sell bitcoin to cover it.

Phylaras

The title is misleading. It's 32 BTC. Or a few million. MSTR pays $120m+ a month in dividends. It makes no sense if that's the purpose.

StonksPeasant

Michael Saylor's MSTR sold 32 bitcoin for the first time. Thats . . . concerning. It was such a small amount in relation to what they own that it makes me wonder if he's testing how the market will react

el_rico_pavo_real

MSTR and ASST would like a word with the Co-Founder of BSTR.

Mountain-Tap-8788

Why Bitcoin, why not ETH and why not Shiba or Doge? Maybe Claude tokens would be actually useful to access AI compute power. Why choose something where a huge percent is already owned by some random MSTR or Satoshi if he decides to wake up. What have they contributed to the world economy to hold so much of it? What backs BTC? What if governments refuse to exchange their currency for BTC?

ClearSnakewood

ETF’s, Futures, Options, Leverage trading … even MSTR and their products are all paper wrappers extracting real demand from Bitcoin. If it’s not on the blockchain, it’s NOT Bitcoin. The only read adoption is verifiable coin on the blockchain and held in self custody. Rest is ALL paper and fake adoption. Probably unpopular here by now, since this sub has been swamped by ETF holders and traders, but true nonetheless.

Obvious-Setting-2021

Agree. I’m very diversified.  I own BTC. $MSTR. $STRC. $MARA. $IBIT. Very well diversified. 

devCheckingIn

I read MSTR has transferred some BTC to Coinbase? 😨

Able-Juggernaut1224

Maybe TFSA, and just invest in the Bitcoin ETFs. Or invest in so called “proxy” like MSTR. But if you intend to hold the real Bitcoin asset then pay your taxes lol.

dataCollector42069

i paid off my 40k in student loans from shorting MSTR this year lol

LargeSnorlax

The important part is that the stock market was *also* in a bad spot in June 2022. It was sagging from a huge rally in 2021. Gold and metals were in the gutter, the general feeling for everything was off. Now the stock market has been going wild at the same time crypto is in its bear, so all the moaners have something to complain about and point to say look, this is a scam because price no go up. In 2021 we also had the ultra enthusiastic people from Wallstreetbets *flooding* the place, even without moons they literally inundated r/cc with thousands of posters. By 2022, they hadn't all lost their shirt yet so they were still positive. These days, there's a lot of MSTR moaners as people got shafted by Saylor, a lot of top buyers and ancient alt holders, so it makes it seem overly negative. Most people here also don't hold Bitcoin and don't actually use cryptocurrency, so their only interaction with crypto is *"Does number go up or down"* which is going to really suck in a bear market.

UC_DiscExchange

It seems a bit ridiculous to compare this to the subprime mortgage crisis. MSTR is not anything like giving out mass 15% ARM loans.

quiethandle

That's literally the business model. It works if BTC goes up ~10% per year (which it certainly hasn't lately, MSTR is at roughly a break even and they've been at this game for a couple of years) Now, why doesn't anyone else ever do to this with any other asset? You could do it with real-estate, you could say, we're going to buy all these properties, and bank the increase in prices of the properties as revenue, and it works great so long as real estate goes up 10% per year. I mean, surely no one has ever tried that before, and certainly not in 2005-2008.

bbatardo

Yes there is. People who bought the notes shorted MSTR and made a boatload. They will unwind shorts and Saylor can sell them MSTR shares to recoup more lol. 

dataCollector42069

My portfolio all time high the only crypto I exposure I grab these days are MSTR shorts. Allowed me to pay off $40k of my student loans and be debt free :)

HSuke

Oh. Now you're asking the smart questions and going down the misleading BPS metric rabbit hole. BPS is calculated as: (Total BTC) / (Assumed Diluted Shares Outstanding) Diluted shares includes convertible debt, so paying that off increases BPS. The problem with BPS is that it doesn't account for cash reserves or for preferred shares (except for the convertible STRK). It also doesn't account for BTC price. It's a misleading metric that can be manipulated. For example, they can keep selling and diluting STRC, and it just increasing BPS, which is why BPS is currently increasing. https://np.reddit.com/r/MSTR/comments/1thtje5/the_measuring_problem/ https://x.com/thelogman/status/2053156489422848062

beerbaron105

I hold 1050 shares of MSTR I am at break even point currently, I think next bitcoin cycle they do an easy 10x remindme! two years

bbatardo

Debt is debt though. Also the people that bought convertibles were shorting MSTR, so they will also unwind those shorts.

Awkward-Silver1333

Who really owns Bitcoin? Currently Satoshi and MSTR holds vast amounts.

Awkward_Potential_

That's inaccurate. Strategy's average price is 66k and BTC is at 77k. MSTR is 10x where it was last bear market.

FireBest59

First, there aren’t enough cyclists to be the reason why the price dumps, unless the mega whales are also cyclists. Which would mean this is a self-fulfilling prophecy and you’re betting on the wrong side either way Second, the price before the halving isn’t what determines the cycles. The cycle works on a time basis, where the tops, bottoms, and major price movements consistently happen around the same timeframes after the halving starts. And once again, this cycle followed almost the exact same timing as every other cycle Also, the ATH happened barely 2 weeks before the halving, which can easily be explained by the sudden inflow of money from countries, ETFs, MSTR, and all the other bullish adoption news. It wasn’t far off anyway, and it’s mostly irrelevant because the overall price action is still basically copy-paste when you compare the timelines. Every cycle, people say “this time is different” because of some supposedly unique factor, and every time they end up being wrong. This cycle will probably be no different, especially with an even weaker argument Look at the cycle low multiple chart and you’ll see the only real difference is diminishing returns and smaller price swings, which makes sense because of the growing market cap, but they still happen around the exact same timeframes. Yet somehow people still compare cycles on a yearly basis like normal stocks instead of comparing the days since the start of halvings. And those timelines naturally shift slightly forward each cycle because mining difficulty doesn’t adjust fast enough for block production times to consistently stay at exactly 10 minutes The only way we’ll know if the cycle is broken is if the bottom isn’t around October before a new bull market erupts

Dmarine999

It certainly feels this way.... BTC treasury companies, lead by MSTR, are hoarding and making it less decentralized. I feel like this is not a good thing. I have just hit 2 coins recently, but I feel that I'm too late too the party.

Starkey18

Veryyyy generous. MSTR liquidating even 10% of their stack takes me 50% of bitcoins price out

UC_DiscExchange

So we can agree that MSTR **does** hold the amount of Bitcoin they claim. Now the concern is risk of colluding with the board/execs to embezzle in the future? Doesn't that risk exist for every company?

HSuke

Why can't they just act like a normal company and focus on increasing long-term shareholder value and EPS? That's really frustrating for STRC and MSTR shareholders.

Laffargan

I hope my MSTR 100 puts will be cooked,then I can buy some real Bitcoin with it 🤣

No-Put7619

I don't understand. Are you asking why would MSTR cooperate? Or why would the government buy? I'm looking at Intel as an example. Something like this recently happened to that company. I guess I would have to go back and see why Intel went along and why the government bought Intel. I'm not saying any of this is likely. I'm just trying to create a scenario suggested by Luke Groman.

No-Put7619

I just watched Luke Gromann on TFTC. He suggested that Warsh could “cap” the price of Bitcoin — but when asked how, he admitted, “I have no idea.” I don’t think it’s likely, but if the Fed (or Treasury) wanted to try, the only plausible route I can imagine would be using MicroStrategy’s Bitcoin holdings. MicroStrategy holds about 4% of the available Bitcoin supply. One theoretical option would be to acquire a controlling interest in MSTR to gain access to that Bitcoin. A forced buyout or large purchase of MSTR shares could, in that scenario, let officials influence — or at least remove — a meaningful chunk of supply from the market. It’s an unlikely and extreme play, but it’s an interesting thought experiment. As a side effect, a large buyout of MSTR at, say, $800 per share (financed by expanded money supply) would also inflate U.S. stock-market valuations, making them look more attractive. I'd like to hear any alternative theories about how that might accomplish this.

Previous_Valuable873

Honestly, I think BTC will never reach the non inflated price of 100k high ever again of 2023. Look at the USD, how much it devalued since. Tether and MSTR bound to spin out of control both of them, pulling the whole shit down. (I have been around since 2012 and through btc-e and mtgox days...) BTC had its run, now its just a puppet of centralized government surveillance. I'd look into privacy coins if I were you guys, to continue the actual aim and vision Satoshi had with BTC.

RUYYRUYY

AFAIK, the last time Saylor said anything about how much bitcoin he, not MSTR, personally owns was 2024. Who knows if he even has any?

benditbackwards

remember its not one man, its all the retail that are buying STRC and MSTR that made make up the 4%

StitcherSteve

MSTR 😉

No-Put7619

I like Doomberg. He’s smart, funny, and well spoken. But a recent take on BTC and MSTR reads like a conclusion looking for a reason. Previously he was negative on Bitcoin for reasons unrelated to MSTR — MSTR wasn’t part of the critique. Now that MSTR is succeeding, his main concern is suddenly MSTR. It’s like saying, “I don’t like X because it will never work,” then when person Y succeeds at X the argument shifts to, “I would have liked X if not for Y’s success, but now I’m worried.”

HSuke

I could've sworn you were 100% in MSTR and BTC.

dataCollector42069

best part of crypto is shorting it. MSTR puts printing

HSuke

Can confirm. The BTC bulls in the MSTR community mainly buy MSTR instead of STRC. If anything, our buying STRC helps Microstrategy fail harder and faster. It makes it less sustainable in the long run.

devCheckingIn

MSTR stock being pummeled this morning.

dataCollector42069

Idk how "reputable" news sources like CNBC and Bloomberg don't just straight up call MSTR/STRC a ponzi

Glad-External8640

In less than 10 years all BTC will be bought by MSTR and other big boys....the need for seeds and passwords protection will be wiped out for ever (fortunately)

Crivos

They went all in on MSTR instead.

Scared-Metal9294

I’m down $625k as of Friday. Bought BMNR 8 months ago, an ETH DAT thinking it would preform similar to MSTR and once adoption started to gain momentum it would follow. I know a lot of people recommend to hold crypto for a long time (not sure how long) however, once there’s a correction in equities, I think we’re going to see severe bleeding in crypto.

Illustrious-Boss9356

The bonds are convertible into equity, so while its 0% they participate in your upside. In scenarios where MSTR does very well, the cost of capital will be much greater than 0%. Also, it's not 0% because they are retiring the bonds at a 7-8% discount. So it's really like 3-4% bonds (maturity in 1.5 years) vs 11.5% preferred stock. My understanding is this pref is also non-cumulative (most post-GFC prefs are). So they can skip payments but can also resume them to build credit market reputation again.

r2d2overbb8

Bitcoin and thus MSTR do not have any cash flows. (The business intelligence company is at best, treading water, and not important) MSTR has partially used preferred shares and debt to finance a large portion of their bitcoin purchases, so that when combined after this buy back of debt strategy owes roughly $1.647 billion in preferred and dividends every year going forward. How do they pay it? Issuing more MSTR shares will make BTC Yield go down, so will selling bitcoin, and so the only option is to issue more debt or preferred shares. You do that a few years in a row and due to compound growth that number quickly spirals out of control.

r2d2overbb8

you have it backwards. Convertible bond arbitrage requires buying the convertible bonds and shorting the shorting the stock. The imbedded call option in the bond is the long side of the trade, so to off set it they need to short the stock. They are betting on volatility. They want MSTR's stock to go up and down as much as possible because every big move they make money. If MSTR just had a slow constant decline of 60% then they probabaly would not make much profit. Bitcoin and thus MSTR have been very stable compared to last year which is why those vol traders are more willing to sell back their debt.

r2d2overbb8

from my quick calculations with this move MSTR's weighted combined debt/preferred rate went from 6.84% to 7.61%. Any time you can increase your costs by over 10%. You got to do it.

HSuke

Convertible bond purchasers have long-term short positions on MSTR. 1. If the price of MSTR goes up (from when they purchased it), they gain the premium from the loan and can offset their short with the convertible shares. 1. If the price of MSTR goes down, they gain from the short position, and redeem the loan for the principal amount in cash. And since the price of MSTR dropped 60% from their purchase price of $433, they must've taken a huge profit from their short positions.

ProceduralTaco

I think people didn't react much because he is just telling the truth. Whatever you think about MSTR Saylor is being very transparent. He could have to sell btc but he also may not have to. I don't really get why people buy the common stock when you can own a btc ETF or just btc.

Excellent_Can2901

More like a nice invention to get normies to give MSTR shareholders more fiat to buy Bitcoin with.

BitcoinBaller420

You understand perfectly why this is a controversial prediction. I haven't actually seen the earnings call funnily enough, but I feel pretty tuned-in to Saylor's mind (not surprised that they said they could sell Bitcoin, also not surprised the world was surprised because everyone loves to exaggerate and no one can just see the nuance of the fucking thing)... and he sees what I see because he helped me see it... Strategy does not need to sell MSTR common for STRC sales to make sense for a very long time with Bitcoin at least like $750k / coin, and further, they have decided they don't need to sell MSTR to avoid spooking credit markets and wreck the network effect before it starts. It's started. It's on. And they are going to just lever-long as hard as they can during / inducing an insane mind-melting short squeeze that will expose a lot of people swimming naked out there imo. ps I dig your style too homie