MicroStrategy Buys $250M in Bitcoin, Calling the Crypto ‘Superior to Cash’ - page 44.

fillippone

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Not much is disclosed about MicroStrategy strategy holding their stash.

All I could find is a declaration is actually one of their subsidiaries, called Microstrategy holding their bitcoins, as they previously disclosed.

Quote from: fillippone on June 07, 2021, 05:06:31 PM

detail on the newly formed company just to hold the coins: Macrostrategy.

Quote

MicroStrategy’s existing approximately 92,079 bitcoins will be held by a newly formed subsidiary, MacroStrategy LLC.

It is not immediately clear why Microstrategy want to create a new company (that would presumedly be 100% owned by Microstrategy) to hold his bitcoins.

Digging on their website I also found a document with a checklist on the checklist used to determine which kind of custody of the coins:

Not much informations however on how this checklist should direct the decisions about this:

Lastly, a declaration of Micheal Saylor spoke vaguely about “self-custody” without going much into details.
MICHAEL SAYLOR: WE CUSTODY OUR BITCOIN AND DO NOT LEND IT OUT

Quote

In a recent interview at ETF Think Tank, Michael Saylor explained why his company purchases bitcoin directly, custody it themselves, and doesn't lend it out.

The fact that not many details about the custody scheme itself make me think. Security by obscurity is never a good approach, and this lack of details about the scheme makes me think it is way more weak than we think (thinking about the checklist mentioned in the first point).

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Quote from: Dabs on September 18, 2021, 08:58:02 PM

Quote from: jaysabi on September 18, 2021, 02:55:04 AM

The board is definitely not a multisig, it wouldn't make sense for several reasons. First, with any company, the board generally doesn't have access to bank accounts for the company so there would be no reason to give them such access with bitcoin through a mutlisig setup. It's cumbersome and needlessly bureaucratic, and therefore unnecessary. Also, the board doesn't really have any power to check Saylor due to his super majority voting power, so there's no reason for him to share responsibility with the board. They serve as figureheads only with no real power in the company. You definitely wouldn't give people like that responsibility to control any part of the company's day-to-day operations, which again would be needlessly bureaucratic.

In that case, it could still be multi-sig and he controls super majority of the keys. An example would be a 3-of-7 quorum, and he has all 7, but 2 other highly trusted employees (not necessarily part of the board, but usually are) have one key each, and the other 5 are kept as backups somewhere safe. Why? What if Michael Saylor the individual gets hit by a bus? The company has to survive and it would need access to the coins. Then one other key can be released by his lawyers or something like that.

The way he talks, it would seem unlikely he has the company bitcoins in third party custody.

I mean, you don't need to be separate individuals to do multi-sig. I do it myself, altho I usually use single sig to save on fees. I'm going to wait for full taproot to go live before doing any more multi-sig.

Otherwise we are looking at the next QuadrigaCX. (The exchange where the owner with sole possession of the keys died.)

Extremely unlikely there is multisig in any fashion going on. I also agree with Fillippone that I would expect that the coins are professionally custodied by Coinbase since I believe that is the company that is buying the coins on MSTR's behalf. It would make poor business sense and be extremely risky to have Coinbase execute the trades and then move billions of dollars worth of coins to another wallet controlled by Saylor personally, or some combination of Saylor and the Board in a multisig set up. I would be extremely shocked if those coins ever left the custody of whatever platform placed the trades to buy them, because there's no logistical or business reason for them to and only increased risk associated with doing so.

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Quote from: jaysabi on September 18, 2021, 02:55:04 AM

The board is definitely not a multisig, it wouldn't make sense for several reasons. First, with any company, the board generally doesn't have access to bank accounts for the company so there would be no reason to give them such access with bitcoin through a mutlisig setup. It's cumbersome and needlessly bureaucratic, and therefore unnecessary. Also, the board doesn't really have any power to check Saylor due to his super majority voting power, so there's no reason for him to share responsibility with the board. They serve as figureheads only with no real power in the company. You definitely wouldn't give people like that responsibility to control any part of the company's day-to-day operations, which again would be needlessly bureaucratic.

In that case, it could still be multi-sig and he controls super majority of the keys. An example would be a 3-of-7 quorum, and he has all 7, but 2 other highly trusted employees (not necessarily part of the board, but usually are) have one key each, and the other 5 are kept as backups somewhere safe. Why? What if Michael Saylor the individual gets hit by a bus? The company has to survive and it would need access to the coins. Then one other key can be released by his lawyers or something like that.

The way he talks, it would seem unlikely he has the company bitcoins in third party custody.

I mean, you don't need to be separate individuals to do multi-sig. I do it myself, altho I usually use single sig to save on fees. I'm going to wait for full taproot to go live before doing any more multi-sig.

Otherwise we are looking at the next QuadrigaCX. (The exchange where the owner with sole possession of the keys died.)

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Quote from: jaysabi on September 18, 2021, 02:55:04 AM

Quote from: Dabs on August 25, 2021, 07:35:53 AM

Quote from: JayJuanGee on August 24, 2021, 02:32:36 PM

MSTR's coins (and Saylor's personal stash as well) are not exactly "locked up"

His personal stash, maybe he can do whatever he wants with those, but I am guessing he has those under multi-sig and it will just be a hassle for him to actually do it.

The company stash, it's also very likely to be multi-sig with the board members,

<…>
How do you think he stores his bitcoin? 18k BTC personal stash, and company coins 108k BTC ... ... You have that much, better put they keys in some building with armed guards. Be your own bank. Literally.

The board is definitely not a multisig, it wouldn't make sense for several reasons.

This is an interesting research I can Try to diss over something about.
Definitely I would rule out any multisig option. I would rather think about a professional custodian. This would be much safer from every point of view: operational, legal and fiscal.
But yes, definitely I will try to find something about it.

Quote from: Daltonik on September 17, 2021, 03:58:09 AM

Microstrategy CEO Michael Saylor in a dialogue with Emily Chang on bloomberg TV
<…>

I am an embarrassment to myself. I was so obnubilated by Emily Chang hotness I didn’t even notice you posted the exact same link just before me.
Once again, well done.

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Quote from: oHnK on September 07, 2021, 10:35:52 AM

Quote from: Daltonik on September 06, 2021, 03:34:19 PM

Michael Saylor's strategy regarding the commitment to bitcoin apparently caused anger in the S&P Dow Jones Indices, they decided to make the following adjustments to the S&P 500, S&P MidCap 400 and S&P SmallCap 600 indices, including MicroStrategy Inc.which will be removed from the S&P SmallCap 600. The changes will take effect before the opening of trading on Monday, September 20, 2021, to coincide with the quarterly rebalancing: Healthcare Services Group will replace $MSTR MicroStrategy Inc. in the S&P SmallCap 600. MicroStrategy is no longer suitable for the S&P SmallCap 600, as well as United Insurance Holdings, according to a press release from S&P Dow Jones Indices. https://www.spglobal.com/spdji/en/documents/indexnews/announcements/20210903-1443045/1443045_sept2021-546-shuf-rebal.pdf

The anger of the S&P Small Cap 600 Index is so baseless that they even mention that the MSTR strategy is no longer compatible with the index. It seems to be fairer, they should explain more specific points. Which strategy is not suitable, does the company open in BTC investments making the index problematic? where is the problem. Even so far, MSTR's share price has remained stable. which market capitalization do they measure? CMIIW

There's a couple possibilities for why MSTR was dropped from the S&P 600 index. The first and most likely is that the various S&P indexes try to track the US economy as a whole through companies in each major sector of the economy at various size levels. Now that MSTR is basically trading as a bitcoin proxy, the reason it was originally added (exposure to technology companies in the US in the smallcap range) is no longer applicable and it no longer makes sense to include it. The second possibility is that MSTR is too large to be in the S&P 600 now, since companies are added when they are between 0.7 and 3.2 billion in market cap, and at 6 billion now MSTR is too large for this index. However, I think this second possibility is less likely. The first makes more sense. It has nothing to do "anger" over MSTR buying bitcoin and everything to do with an investment in MSTR no longer representing exposure to small cap technology companies and predominately representing exposure to bitcoin, which as was said in the press release, is not compatible with the purpose of the S&P 600.

worle1bm

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This accumulation has profited him and MSTR enough and he is kind of genius as he purchased btc at an average price of $28k approx which is even less then this year ATL by doing DCA investment.As per reports he has bought 285 bitcoins per day at an average as this whole thing was done in 400 days and you can see how much profits he have made out of it.Also MicroStrategy now holds more btc than cash reserves of 80% of companies in S&P index 500 which is amazing.He is still into it and will pour funds into it which is good news for all.

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Quote from: Daltonik on September 17, 2021, 03:58:09 AM

Microstrategy CEO Michael Saylor in a dialogue with Emily Chang on bloomberg TV about the latest purchase of bitcoin for $250 million, the recognition of bitcoin as a means of payment in El Salvador and how the Solana and OpenSea scandals strengthen the SEC's movement towards regulation.

I'm a bit wary about the OpenSea insider trading fiasco, I have about 3 or so NFTs in there and I hope that it won't affect the whole website at all because there's definitely going to be a lot of problem in this one and I do hope that we will see some solution to that issue that OpenSea has.

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Quote from: Dabs on August 25, 2021, 07:35:53 AM

Quote from: JayJuanGee on August 24, 2021, 02:32:36 PM

MSTR's coins (and Saylor's personal stash as well) are not exactly "locked up", but I otherwise agree with the overall sentiment of your post Dabs and your various other points including that MSTR nor Saylor are likely to be either selling or attempting to be manipulating the BTC price, even if they are capable of doing whatever the fuck they want - in terms of free market aspects of bitcoin (but of course, there would likely be concerns from some regulatory bodies (such as SEC - and even share holder concerns) if Saylor were to try any kind of significant or meaningful levels of selling stocks to buy lower kinds of things).

His personal stash, maybe he can do whatever he wants with those, but I am guessing he has those under multi-sig and it will just be a hassle for him to actually do it.

The company stash, it's also very likely to be multi-sig with the board members, and the whole company has to agree. Maybe he has more signatures, but I'm almost sure he needs at least one more other person if it's set up correctly. There may possibly be a last resort backup plan like buried in some high security vault.

Maybe? We are just speculating. Imagine that one dude who has hardware wallets all over the planet and he's just a family man.

Most of these guys have their own "castles" ... I mean houses, or office buildings, with adequate physical security. If you had an actual gold bar, you could safely store your bitcoin paper wallet in the same place. Multi-sig would just require more than one of these safe places.

Also quite possible that Saylor has all the keys anyway, so he can still control all the bitcoin of the company all by himself, I'm still pretty sure it's in some form of multi-sig either case.

How do you think he stores his bitcoin? 18k BTC personal stash, and company coins 108k BTC ... ... You have that much, better put they keys in some building with armed guards. Be your own bank. Literally.

The board is definitely not a multisig, it wouldn't make sense for several reasons. First, with any company, the board generally doesn't have access to bank accounts for the company so there would be no reason to give them such access with bitcoin through a mutlisig setup. It's cumbersome and needlessly bureaucratic, and therefore unnecessary. Also, the board doesn't really have any power to check Saylor due to his super majority voting power, so there's no reason for him to share responsibility with the board. They serve as figureheads only with no real power in the company. You definitely wouldn't give people like that responsibility to control any part of the company's day-to-day operations, which again would be needlessly bureaucratic.

fillippone

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Not exactly on topic, but Micheal Saylor gave a nice interview at Bloomberg TV.

https://twitter.com/bloombergtv/status/1438636397561323523?s=21

I am surprised how many answers are quite similar to the ones I would have given.

Ps. Going further OT: did I mention Emily Chang is hot?

Daltonik

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Microstrategy CEO Michael Saylor in a dialogue with Emily Chang on bloomberg TV about the latest purchase of bitcoin for $250 million, the recognition of bitcoin as a means of payment in El Salvador and how the Solana and OpenSea scandals strengthen the SEC's movement towards regulation.

Quote from: https://twitter.com/michael_saylor/status/1438677607717949440

fillippone

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Some companies live in the year 3000:

https://twitter.com/BitcoinMagazine/status/1438153945118134277?s=20

Bloomberg piece:

Quote

MicroStrategy’s Bitcoin Pile Dwarfs Most S&P 500 Cash Holdings
Software company recently bought an additional 5,050 Bitcoins
Value of digital assets have swelled to about $5.3 billion
By Julia Fanzeres and Tom Contiliano

(Bloomberg) --
MicroStrategy Inc.’s Bitcoin holdings dwarf the traditional corporate treasuries of most members of the S&P 500 Index after its latest purchase swelled the value of the digital assets in its coffers to over $5 billion.

The enterprise software provider, which made Bitcoin purchases an official corporate strategy a year ago, announced Monday that it bought an additional5,050 Bitcoins for about $242.9 million, raising the value of its 114,042 coin hoard to about $5.3 billion. That’s more than the amount of cash currently held by 80% of the non-financial companies in the S&P 500, including such bellwethers as Starbucks Corp., Verizon Communications Inc. and Home Depot Inc.

Bloomberg

The company’s outstanding common shares are worth about $6.5 billion and it holds around $56.4 million in cash. Shares of MicroStrategy have surged more than 300% in the past year, mirroring the gains in Bitcoin. The stock fell 4.1% to $616.33 as of 2:56 p.m. in New York. Bitcoin gained 3% to $46,525.

Dabs

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Quote from: ?? on ??

He even once stated that MicroStrategy will not sell bitcoins in this century, but I have already repeated many times that, in my opinion, these are just fine words, nothing more. You shouldn't rely on them.

True, words can change. But usually medium to large companies take time to move or do anything. It is likely that in order to sell any bitcoins, as a company, the entire board would have to be convinced, and while we speculate, I'm fairly confident that their self-custody solution for bitcoin is both cold storage and multi-signature, so it's going to either take more than one person or more than one device and possibly more than one location to move any bitcoins. Inconvenient security.

oHnK

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Quote from: ?? on ??

in my opinion, these are just fine words, nothing more. You shouldn't rely on them.

When a Bitcoin investor relies on Whales' statements, I don't understand why that can happen, let alone the most risky market right now is the crypto market. Statements and the entry of institutional investors should be a momentum to take action on investment decisions and our portfolio in our investment position to take advantage of it. The MSTR CEO's words are indeed still quite stable and support BTC but we can't make it like Elon Musk. When EM said it supported, the price immediately went up and when Tesla banned BTC again the price immediately fell. Bubble because the issue should be addressed wisely so that the crypto ecosystem remains stable. Currently, the issue of China is no longer dominant in the market. The market is moving on from the previous major correction, and I hope that players in the crypto market are mature enough to respond to the ongoing movements so that price appreciation continues to occur.

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Quote from: ?? on ??

The large-scale purchase of bitcoins seems to have improved MicroStrategy's performance in the stock market. I wonder what happens if Saylor suddenly decides to get rid of bitcoins?

If that were to happen, the share price would drop significantly because Saylor has repeated ad nauseam that a premium asset you don't sell it, if anything you borrows against it, least of all in the case of Bitcoin, which is the best. Other times he speaks of holding at least a decade.

Giving up trust in a company's CEO is a good reason to sell the stock, which I did in the case of AT&T.

fillippone

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I finally managed to put online an updated version of my spreadsheet:
Please bear in mind that I haven't seen this posted elsewhere.

Source

Microstrategy financed the larger part of this new buy via their ATM facility.
You read it here first.

The Sceptical Chymist

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Quote from: ?? on ??

Well, Saylor is buying again at any time and does not wait for market corrections to buy the cheapest coins.

He'd be silly to try to do that. It's almost impossible to time the stock market, much less the bitcoin market. And I think Saylor believes bitcoin is headed much, much higher than it is at any price point in the range it's been trading at for months now, so in his eyes $48k is a steal.

And holy shit, that's a huge bitcoin purchase! Granted, I expected MSTR to buy more bitcoin, but wow. Now I'm wondering when they're going to stop buying--obviously the money to finance the purchases has to come from somewhere, and there's got to be a limit even for the most hardcore of bitcoin bulls.

Quote from: ?? on ??

Currently MicroStrategy holds ~114 062 BTC and is the largest Bitcoin holder among institutional investors.

That's astounding. Hopefully MSTR has strong hands, because as I've said before if they were to dump that bitcoin on the market all at once, it'd be a big OUCH to every bitcoin holder in existence. Pretty sure that's not going to happen, though.

fillippone

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Quote from: ?? on ??

Michael Saylor continues to accumulate BTC reserves. He announced today that MicroStrategy has additionally purchased 5050 BTC.

This is a big purchase.
We have seen Microstrategy buying bitcoin with “spare cash”, or clips of around 10 millions, from what I think is generated trough their commercial operations. On the other hands we have seen them buying large chunks on the back of debt issuing or ATM facility.

Going into the details it would seem they issued some more shares trough the ATM facility, leaving only 20 millions trough direct buying.

This would change a lot.

I updated the spreadsheet in this way.

The Twitter version of myself asked Micheal Saylor if he can clarify some points here. I bet my questions will go unnoticed.

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Quote from: Daltonik on September 10, 2021, 07:57:31 AM

Unlike CEO Michael Saylor, who has not sold any shares since 2012, some senior executives of MicroStrategy are ambivalent about the implementation of the bitcoin strategy-as an investment tool.

SEC documents show that MicroStrategy chief financial officer Phong Le and chief technology officer Timothy Lang offloaded the shares in August of this year, exercising approximately 30% of the options they received as compensation. https://www.sec.gov/Archives/edgar/data/0001050446/000119312521117745/d64521ddef14a.htm https://www.sec.gov/Archives/edgar/data/0001050446/000119312521117745/d64521ddef14a.htm

source: https://cointelegraph.com/news/insiders-sold-microstrategy-stock-after-bitcoin-s-bull-run

Bear in mind that ofter those shares are part of the compensations for top-tier management.
Instead of paying themselves huge remuneration in the startup phase, where they would lack the funds, they issue moon-striked options that would allow them to cash out if the startup is successful. Turns out that this is also very tax-efficient, allowing them to save huge capital gains.

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Now the money is free, and so the people will be

says they still hold 2/3 of their options or something like that. 7 million each. I mean its not a bad thing to exercice stock options. I would just for the goal of diversifying my assets, and not have everything in the same company.

Daltonik

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Unlike CEO Michael Saylor, who has not sold any shares since 2012, some senior executives of MicroStrategy are ambivalent about the implementation of the bitcoin strategy-as an investment tool.

SEC documents show that MicroStrategy chief financial officer Phong Le and chief technology officer Timothy Lang offloaded the shares in August of this year, exercising approximately 30% of the options they received as compensation. https://www.sec.gov/Archives/edgar/data/0001050446/000119312521117745/d64521ddef14a.htm https://www.sec.gov/Archives/edgar/data/0001050446/000119312521117745/d64521ddef14a.htm

source: https://cointelegraph.com/news/insiders-sold-microstrategy-stock-after-bitcoin-s-bull-run

Topic: MicroStrategy Buys $250M in Bitcoin, Calling the Crypto ‘Superior to Cash’ - page 44. (Read 20809 times)