Topic: MicroStrategy Buys $250M in Bitcoin, Calling the Crypto ‘Superior to Cash’ - page 65. (Read 20690 times)

If you are going to invest into something you probably already know what they invest into as well. I am not going to put my money into a place that I have zero clue what they do at all, if I do not do my research and just put my money there without checking their portfolio that is my own fault and nobody should be blamed for it.

Bitcoiners invest into bitcoin companies, so people who invested into microstrategy already knew what they were about and had their own bitcoins as well and they put their fiat into MS in order for them to buy more bitcoin as well. Plus, when you do make OTC purchases you could get bulk discount, usually not huge but it is a good amount, so even at the purchase you gain like 1-2% profit right away, but during selling period that causes a problem as well.

In the Pomp Podcast linked in OP Saylor, came up with this statement:
 
Link here here

Well, this statement is factually true, but needs a little bit of clarification, imho.
 
Given the peculiar capital structure of Microstrategy is impossible to oust Saylor as CEO of the company.
 
From their SEC Filing:
Source:
https://ir.microstrategy.com/node/17726/html

Saylor controls 75.2% of the voting capital of the company. Hence he can dictate everything in the company.
Of course this can be viewed as a call to stability and focus on business, as they stated in some interviews, but this is actually relevant information not to be ignored while reading the statements in the first paragraph.
 

Oh.  Now you want to proclaim yourself as some kind of expert, even though you made stupid ass and seemingly out of touch kinds of statements.    Difficult to consider you as any kind of expert based on what you have already said, and also your apparent failure/refusal to account for clear analysis and discussion that I pointed out to you.


I was counter responding to your assertion of plausibility of lawsuits against Microstrategy, that you seem to have proclaimed without knowing specifics about how microstrategy had gone about their BTC purchase(s).


Contrary to your assertion here, surely, you seem to be out of touch with the real world, based on your already made statements in your earlier post.


Who said that I am taking that position, you?


Fair enough.  So, perhaps we can either postpone further reaction to the matter for now.   Of course, there is no reason for you to necessarily agree with the analysis of the guests on the podcast.


I doubt that I really need to defend this statement much further than my having had made such statement in response to jaysabi.  I do agree with a seemingly overall presumption of your statement that it would be more difficult to sustain a claim about failure to act rather than sustaining claims for irresponsible actions, but in any event there is quite a bit of additional evidence of mainstream financial personalities making the case for investing in bitcoin and even making the case for having some slight allocation in bitcoin (such as 1% or more).



You probably need to study the specifics about how Microstrategy had gone about their investment and their disclosures to their investors.  There could be lawsuits if companies fail and refuse to make disclosures - especially public companies, and even private companies could get in trouble from partners if one partner breaches fiduciary duties to another partner.



Some of this could change, especially if it becomes clear that certain currencies are losing value faster than other currencies, and the options and tools for investing in bitcoin have become much easier to diversify into.



There could be lawsuits in either direction depending on how disclosures are made and depending on if some companies might not be taking prudent and reasonable actions to protect shareholder value.

There is no precedent for anything like that. It will never happen. Not even investment funds could ever have requirements like that leveled on them, let alone ordinary companies who aren't in the business of investment.

I would expect the exact opposite, actually. Companies who invest in BTC like Microstrategy will get sued if there is a significant decline in BTC's value and accordingly the value of company shares.

Companies can't really be blamed for holding cash reserves in the currency they predominantly operate in. They can be blamed for making unsound investments. And whether BTC is actually a sound investment doesn't really matter. The point is that someone will bring a lawsuit when they incur losses on their shares which are ostensibly tied to a BTC crash.

Calm down dude, I work with in the investment industry. There will not be any lawsuits for companies that refuse to take a stake in BTC, even thinking that shows how far outside the mainstream you are.  I'm into BTC, but I don't drink the Koolaid so hard that everything Bitcoin is automatically good and every reckless swing for the moon needs should be cheered without regard for real world consequences.  Refusing to recognize the company has taken a boatload of risk here and that it's not all automatic upside just because they bought BTC... man, that's extreme.  I'm far too sensible to be that extreme.  

I wasn't even responding to your post though, so no, I haven't had a chance to listen to the podcast you posted yet.  I do, however, appreciate the point you made about giving forewarning to investors and offering to buy any out before proceeding.

You seem to have your head in the sand, jaysabi.  Are you doing this on purpose, or what?

There are likely to be lawsuits in the coming years for companies that fail and refuse to take any position in BTC, instead of the way that Microstrategy approached the matter.  Have you listen to the podcast that I referenced in my above post, in order to attempt to inform yourself about specifics of this particular, rather than continuing to blindly post nonsense?

Or it could be the death knell for the company if bitcoin tanks and the "stability" they were looking for cuts their cash reserves in half.  And nobody holds cash for 100 years, so that's not even an appropriate comparison.  Nobody who is invested in the company is going to be alive for 100 years, so playing for 100 years from now doesn't benefit shareholders today. 

Again, if the company has more money than it knows what to do with, I'd want that cash back in dividends or stock buy backs.  I don't want the company gambling with my share of the profits in something that could pay off but could also blow up.  I can gamble myself if I'm inclined, that's not what I invest for.  I'm 100% out as an investor in any company that is this reckless.

My prediction is if bitcoin tanks again (which is almost a given that it will at some point) and the company is forced to mark down their holdings and reports a massive net loss, you'll see shareholder lawsuits for breach of fiduciary duty.

I appreciate the recent analysis/discussion of Andy Edstrom, Preston Pysh and Brady on the Swan Signal podcast (interview about 1 hour in duration) from a couple of days ago regarding the strategies that were employed by Microstrategy (MSTR) to ensure that they offered then current MSTR share holders an opportunity to get bought out of their MSTR stock prior to Microstrategy's beginning their significantly-sized endeavor into BTC HODLing.

In other words, Microstrategy seemed to have been more than responsible in not only disclosing what they were doing with the company to their shareholders, but also providing opportunity to those then existing shareholders who were not on the same page to get the fuck out of MSTR (at a then premium price).

These funds control big % of crypto in circulation. This creates several big points of centralization and big opportunites for market manipulation, isnt it?

Michael Saylor in an interview said that stakeholders in microstrategy already significantly held bitcoins before the huge buy-in. So they had already identified value in it and recognized the bitcoin standard as a reasonable direction for them to go considering the alternative of holding $500 million in their balance sheets

That huge gamble could shape the future of the company over the next 100 years, holding all that money in fiat is also a huge gamble, but one which is quickly depreciating. Distributing the wealth back to shareholders through buybacks or dividends is an okay approach, but it doesn't put the company in any better position than they were, neither does it set them up for the next 10 or so years.

I agree on Bitcoin being speculative and highly volatile, but it's an ever evolving system with great potential for growth, microstrategy is staying ahead of the curve by taking a good position now. In the near future we may see other cooperate fast-followers adopting their aggressive approach.

This right here would be such a problem for me if I was a shareholder. If the company has more money than it knows what to do with, as a shareholder I want that money paid out in dividends or or stock buybacks. Things that immediately put value back in my hands. Not taking a huge gamble with a significant portion of assets by investing in a speculative and highly volatile asset. This is the opposite of what responsible stock stewardship looks like.

This is a wonderful news for the crypto space. $250 million is a whole lot of money to invest in bitcoin. Although, it might not have any tangible effect on the price of bitcoin, it shows that people are beginning to see and accept that bitcoin is superior to cash in terms of investment yields just because bitcoin is not controlled by the government just like fiat.
This lot of money pumped into bitcoin will help to tell people that bitcoin is the future of currency should be adopted as massively as possible

Yes... bitcoin is going to go down and it is going to go up, but we are currently in a kind of season in which bitcoin is more likely to go up more than it goes down.

So, it is a BIG so fucking what?  about the going up and down, as long as some folks are focused upon making sure that they have a decent enough stake for the UP that is likely to come in the coming months to years... Yeah, it could take a bit of time to reach a kind of blow off top, or there could even be a kind of blow off top that is similar to 2013 in which there ends up being two blow off tops, so in that regard, some people might end up getting faked out by the first blow off top, and then they become disappointed because they miss the second blow off top.


Based on the last couple of interviews with Slayor (with Pompliano a couple of days ago and with Guy Swann today), I doubt Microstrategy is inclined to sell their bitcoin any time soon.

And, sure the wall street folks can proclaim that Microstrategy stocks are overvalued all that they like - of course, wall street folks are not exactly any kind of indication regarding either what bitcoin is or how bitcoin is likely to grow.  Wall street is hardly any more correct about bitcoin as they were in 2013, 2014, 2015, 2016, or 2017.. Sure.. some of the wall street analyzers might be getting a little bit smarter, but overall the vast majority of wall street analyzers have little to no clue about either what bitcoin is or where bitcoin is likely to be going. 

In that regard, it seems quite likely that the companies (and the wall streeters) that follow Microstrategy's lead are going to do quite a bit better than those who are poo-pooing it and speculating that Microstrategy might be too balls deep in bitcoin... and surely Microstrategy is a bit balls deep in bitcoin, relatively speaking.  sure, nothing is guaranteed, but some of us who have been in bitcoin long enough recognize that Microstrategy seems to have a pretty good perspective on this whole matter in terms of where to put their chips (even if it might even seem quite a bit more ballsy than even the more greater of bitcoin bulls in these here parts).


I believe that those are NOT the only two options.

Even though Microstrategy is not exactly revealing how they are holding their coins, they seem to be doing a lot of the acquisition and management themselves, and they likely pre-agreed upon a system.. So they bought rather than accepting payments in bitcoin.


Sure, later down the road, they might decide to start accepting payments in bitcoin and even paying invoices and employees in bitcoin, but that is surely not how they got their initial stake.  They were a bit more aggressive than you option two.

Actually, instead of looking at this merely on an institutional (corporate) level, let's look at what some individuals decide to do in this forum.  They decide that they just are going to earn Bitcoin through rinky-dinky campaigns, bounty hunting and faucets, and surely they might be much better off to go out in the world and earn money however that they can, and then use some of that money to buy bitcoin and to strategically set up a plan to accumulate a certain amount of bitcoin.  Same thing is true if some individuals already have investments, they might want to reallocate into bitcoin instead of attempting to get all strategic about how they are going to get bitcoin by providing services etc, and they never really end up being aggressive enough in their approach or acquiring an aggressive enough stake in bitcoin.

This can be a good article for those who are not familiar with bitcoin to not think negatively about it. That is a very good signal and more people may turn to crypto soon after the news goes viral.
In addition, the actions of Michael J. Saylor will also make big businesses around the world want to invest in new technology markets. That suggests there will be more sharks and total capitalization will soon increase strongly in the near future.
Do you have any opinions contrary to my opinion? I will gladly listen.

I really believe that when these huge companies end up liking bitcoin and buying some, they are not going to suddenly do it with their own companies directly, they will probably have two ways that they will do, one they will partner with a wall street type of company, or basically any financial company, and give them a certain amount of money to be handled in the crypto space and that financial company will handle things for these huge companies, or the better option they will just start to accept bitcoin payments which means people will pay them crypto to get things done, like advertisement money most commonly and they will just keep that money aside without spending it, and consider it an investment. These two options are very very viable in the next few years.

Michael Saylor made this tweet yesterday;

I can't however find any information on where exactly the bitcoins purchased are stored. A hardware (multi sig) wallet or several of them is a possibility.
If they plan on holding for the estimated 100 years, the storage medium would have to be easily transferable and accessible to the entire board. I'm of the opinion they would not hire an external service, but, that's just my opinion.

Very very interesting details. Thank you for pointing out!


Do you have a reference for this above statement?

Also, last bit to know: how and where are they storing their bitcoins?

33% is quite impressive and is a bold statement from a public company.
I wanted to attempt to use this template to calculate the percentage of Grayscale held in Bitcoin. I've only been able to get their;
• Outstanding shares (452,847,300),
• Bitcoin per share (0.00095560), and
• Total bitcoins held (432,741)
I've however not been able to get the average price at which they bought as there is limited information on the mode of purchase. Would appreciate some more data

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Michael Saylor just released details of the 16,796BTC acquisition;

Link

~0.19BTC every 3 seconds for 3 days, a bot was probably used to effect purchases. The fact that they were willing to make a bulk purchase of $30-50 million cause of a 1-2% drop in value is bullish in my opinion, suggests that Bitcoin is a steal at the current value.
The first batch of 21,454BTC was made through off-chain transactions before being moved to cold storage through the Bitcoin network.

So, now that Microstrategy has bought a large BTC chunk, how much they now are a "Bitcoin Company" instead of a "Application Software Company"?

Let's do some (basic) math:
Spreadsheet Link


Microstrategy has 7,673,000 outstanding Shares. This means that every share is entitled with little less than 0.005 Cents (little less than 500,000 Sats).
This means currently every share has an embedded 54.77 USD in Bitcoin.
As the share price is 163 USD, this means Mircostrategy is a 54.77/163=33% Bitcoin Company!

You can check all the computations here

It probably makes sense for such large companies to pay someone to take care of their BTC, but I hope they are aware that this is not the right way to own cryptocurrencies - and if any large company decides to do the same, most BTCs will end up in custodial wallets that will eventually turn into crypto banks.

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I’ve read dozens of responses to this tweet and there really are different opinions, but let’s just say I could agree with this one :


https://twitter.com/snieders/status/1306707469700300811

While many will certainly not agree that it would be better like this, because let’s be honest life is too short and no one would mind big companies pumping BTC up to $ 100k in the next year. But it should still be taken into account that these big companies like Google or Apple still have shareholders who are strongly against Bitcoin.

Take Warren Buffett for example, he is supposedly the second largest shareholder of Apple, and given his negative opinion of BTC would it be logical for that company to move in the direction of MicroStrategy? On the other hand, Apple's largest shareholder is Vanguard, which according to PlanB is the second largest shareholder of MicroStrategy, which is definitely an interesting fact.



https://twitter.com/100trillionUSD/status/1306668102839656454