Topic: MicroStrategy Buys $250M in Bitcoin, Calling the Crypto ‘Superior to Cash’ - page 10. (Read 18329 times)

Funny you mentioned P/E, as this ratio for MSTR is plain absurd.
I am not a fan of MSTR as an investment, and I have been consistently wrong in the last year or so. I know others share my opinion and are now underwater. I guess the time is going to tell us, who’s wrong, provided that being right in the long term is a useful, if you had to earlier close your position!

The PE ratio of Microsoft is 40x. NVIDIA 75x. Thinking you pay $150k for a bitcoin buying MSTR is a too simplistic view, is what the market currently tells us. Let's see.

All these reasons are correct (maybe a few minor details have to be slightly adjusted), but the effect is that MSTR is too dear now.
Buying Microstrategy now means buying their bitcoins at 150,000k, or 2.5x valuation.
If you think this valuation is sustainable, according to all the above reasons, then MicroStrategy is a good investment.

It is because MSTR > its bitcoin holdings. To name a few:

- The company has a brilliant CEO (now Executive chairman and president) who holds the majority of voting rights.
- Over time the btc/share increases.
- MSTR is leveraged bitcoin but with downside protection, and they can borrow money against very attractive rates.
- Outside of the US there are many that can't buy the US ETF's (the entire EU for example). But they can buy MSTR.
- People are speculating MSTR gets added to major indexes like the Nasdaq and S&P500. Which means a constant demand for the stock no matter the bitcoin price.
- The MSTR software business has value as well (and generates cash which they use to buy more bitcoin).
- Additionally they are world's first publicly traded bitcoin development company who's products might become highly valuable going forward.
- With their number of bitcoins MSTR basically has become a monopoly. They might use that position to become a bitcoin bank and use the interest earned to buy more bitcoin.
- MSTR is currently massively shorted (>25% of outstanding stocks). If bitcoin suddenly moves up aggressively we might be in for an epic short squeeze.

Saylor often says there is no second best. But there is, it is MSTR.

I was coming to comment on this, which could be huge. On the one hand:

MicroStrategy’s Bitcoin Bet Lifts Its Market Cap Above Nearly Half of S&P 500 Firms

On the other hand, it should be subject to new accounting rules.

I believe that one way or another, if this is a good cycle for the Bitcoin price, it will end up included in the index.

Microstrategy just announced the completion of the issuance of 800 millions of their convertible note: this is a total of 100 millions more than originally planned (they had an option to incerease)




Apparently they still have to buy the bitcoin.
Pump for ants incoming?

Edit:

Done!

In the meantime, Microstrategy announced they priced the issue and raised the. total amount to 700 million.

Source

They will buy the Bitcoins as soon as they have the funds. It can be Tuesday probably.

He’s either a genius or very stupid & so far he looks like a genius. It’s really intriguing to see him relentlessly buying, there doesn’t seem to be anything that will stop him buying. He is repeatedly sweeping up the supply, every weak handed bitcoin owner should look at his persistence & question their own motives. You should always imitate what these kind of people do.

Yeah sure maybe it does not make a lot of sense, but the market is likely showing us that there is a certain kind of appetite for a product that seems inferior to holding bitcoin directly, and at the same time, there are individuals and institutions who are looking at these matters through fiat lenses and comparing their investment opportunities/options to other fiat investment opportunities that they have.. so gosh, if self-custody is so much outside of places that they are ready, willing and/or able to go, then there can seem to be a bit of irrationality in terms of their investment choices that cause prices also to be irrational for longer than anyone might consider viable.. .. .. and in this regard, we might be considering some kind of market movement dynamic to be irrational, but we have not quite understood the mindset of some of the investors who are making such choices (whether they are irrational or not, but they might be eliminating some seemingly rational considerations based on their own perceptions of their financial and/or psychological limitations).

I am not going to claim to exactly what motivates some of these folks because I am not from their world.. and also I am not easily able to put myself into their world including not really knowing which kinds of assets that already exist in their investment portfolio and some of the other motivating factors that they might have that may even have some gambling inclinations or maybe some going with "what others are doing" inclinations.....and for these folks, maybe bitcoin-related products are more "in-trend" than bitcoin itself.

This is what puzzles me the most.
I would have thought, and I was quite adamant to that, that I expected the "premium days" of MSTR when compared to Bitcoin were numbered with the launch of the bitcoin ETFs.
Instead this insanity non only sustained in the following months, but actually grew more.
And this latest move by Micheal Taylor demonstrates there is still appetite for buying bitcoins trough the massively redundant infrastructure of MSTR.

I am not going to claim to know any kind of exact answers regarding why some folks might choose certain kinds of investment vehicles, and surely the fact that an investment vehicle is popular can also drive a certain amount of extra demand for it.

Also, I am not sure how the convertible senior note differs from some kind of a loan or MSTR stock or some kind of a bond in the company, yet institutions and/or individuals choosing to invest in such are still going to weigh advantages and disadvantages to holding different kinds of instruments and perhaps getting exposure to bitcoin, MSTR, Michael Saylor, intelligence technologies and/or whatever else they might perceive their involvement in such convertible senior notes might offer to their purchase of that kind of a financial instrument as compared to other financial instruments as compared with buying bitcoin directly.  And, yeah in a case like this, there may well be ideas of exposure to dollars and getting interest in dollars and perhaps a kind of superiority of investing in a senior convertible note with MSTR than buying USA treasuries... and yeah, they may well be thinking about their investment into something bitcoin related in terms of assured dollar terms that the senior convertible note describes.

Many times people/companies investing into specialized offerings like a MSTR convertible note are already going to have various kinds of financial investments that they might consider either correlated or not correlated to some new thing that they are purchasing... It is doubtful that the convertible notes are the ONLY thing in their investment portfolio, even though surely we cannot overly generalize that there could be some companies and/or individuals that end up overly weighting their purchases into one or another kind of investment, such as an MSTR senior convertible note.

There are some people and/or institutions that like the idea to have a company (such as MSTR) managing, holding and getting exposure to BTC and the various aspects of MSTR and/or Saylor in a kind of sensationalism way... and yeah, various kind of offerings that MSTR makes (in this case senior convertible notes) are going to specify the terms and may have some special benefits that may well not be as good as holding bitcoin directly, but still the person/institutions buying such convertible notes might still consider the terms of such notes to provide some kind of reasonable expectation of returns.. whether or not they actually also hold bitcoin directly too.. (and sure I have no problem considering the idea that some of the institutions/people buying MSTR senior convertible notes might not even directly hold any BTC at all).    

There are other people and/or institutions that are not able (or maybe it is not easy or convenient for them) to buy bitcoin directly, so they are using whatever financial vehicles that they have available to them (or they hear about) to allow them to buy MSTR through such a financial vehicle (yes this is not MSTR, but it is a version of MSTR, and yeah, people/institutions might engage in some investment conduct that is not exactly maximizing in the sense that they might really be better off buying bitcoin directly).

For sure, those of us who already buy and hold bitcoin directly may well be quite reluctant to overly complicating our investments and/or adding various 3rd party risks to our bitcoin investment, but surely there are individuals and institutions that are quite uncomfortable (or even unable) to hold bitcoin directly.

Probably very basic question. Why would someone loan money to MicroStrategy instead of just buying BTC? I am sure there is reason, I just don't know and want to learn.

Here we go again.
Microstrategy announced a new Issue of convertible bonds to finance new Bitcoin Buys.

MicroStrategy Announces Proposed Private Offering of $500 Million of Convertible Senior Notes

Notes will be due on 2032 and Microstrategy reserves the right to issue an additional 75 millions in case of strong demand (I bet this is going to be the case).

MicroStrategy to be added to the Russell 1000. Which means a continuous bid no matter what. Next: S&P500.

https://investing.com/news/stock-market-news/supermicro-computer-microstrategy-set-to-join-russell-1000-3457316

Stroke of luck really, I was on Twitter (X) and saw it was broken 4 minutes previously.

I thought they’d stop at 210,000 too, 1% of the total supply would have been an epic statement. Seems they are not going to stop any time soon, relentless.

Twice beaten to news reporting by LFC_Bitcoin. Well done mate.

Fun fact: today. I read someone betting on Microstrategy stopping at 1% of total supply.
They were wrong only after few hours.

In regards to my earlier description of the MSTR shorters, surely I don't claim to be any kind of expert in regards to what they are doing or even trading in the kinds of ways that they are doing, since those who place shorts (and/or profitable from shorting need to have a certain skill and/or luck and sometimes they will also employ informational warfare to get the market to agree with their short - which may or may not end up working out - since there could end up being a Streisand effect), and so yeah I would not be wanting to make those kinds of plays, but that is part of the reason there are differing opinions in the market including differing risk tolerances and differing ways to achieve success (or die trying to reach success).

I recognize that my own earlier characterization of what the MSTR shorters are doing was not very accurate since they are simultaneously shorting MSTR and longing BTC at the same time, so they are seeming to want to specifically attempt to arbitrage (or target) what they perceive to be the current MSTR premium to suggest that the current MSTR premium is way above and beyond the value of the BTC that MSTR holds and therefore the premium of the value of the MSTR shares is so far out of wack that it has to come back down closer to a more reasonable level.. and so it surely could be possible that the MSTR shorters could play the wave sufficiently well in order to actually profit from the current MSTR premium coming back down in line - instead of their getting reckt as I suggested to be a possibility, yet if they set their short of MSTR and their long of BTC correctly then it may well become harder for them to get completely reckt.. so yeah, earlier I had mischaracterized the way that they were shorting as if they were betting against both MSTR and also betting against BTC when they seem to be merely trying to ONLY be betting on the seeming premium coming down to what they believe should be more reasonable levels... which may or may not end up working out for them, depending upon how greedy they are before taking their profits (and close their short).. and also if the market ends up agreeing with them that the MSTR premium is too much at this particular time.

Edit:  Wow fillippone.. we posted at the exact same time... except yours was entered into the threadchain first.. so there is some kind of a micro-second measurement going on in these here parts.

Let’s say also that Micheal Saylor is “trapped” in his bitcoin investment.
As he stated he would never sell his bitcoin, he is now “obliged” to do so.
In case he sell any coin the consequences for the share price would be catastrophic, as the premium would evaporate almost instantly.

From another angle, I also admire Microstrategy's dedication to accumulating bitcoin. Among the institutional investors, he is the only one I have seen who does that, as if he has no intention of immediately selling the bitcoins that he actually has.

It's not like his fellow institutional investors who have a timeframe when they sell their purchased Bitcoins, but he doesn't seem to have such a timeframe; instead, he just buys the price as long as there is an opportunity, He will take the chances to buy it. To be honest, bitcoin is that precious to him