Oddbean new post about login | logout Saylor is selling more bonds / buying more Bitcoin as Bitcoin goes higher. Cost basis will be through the roof by the end of the bull market.
https://m.primal.net/McFY.mp4
L Saylor You cannot use MSTR to discount Bitcoin's future value. The market already does that with spot Bitcoin. It only makes sense for convertible bond holders because they get "downside protection". But that's at shareholders expense. He should sell stock not debt.
He's going to add fixed income instruments soon, which don't have the same effects as the convertible bonds.
Should this be the metric to track? BTC x Exchange Rate ($) / Total Shares ??? ——————————— Run the #s ….. 331,200($93.4k) / 202,640,000 ——————————— As of 18:45 UTC this equals: $153/share MSTR price is $481/share So if someone offered you 198 shares of MSTR or one BTC right now, that would be approximately the same current value. What about the future value of 1 BTC versus 198 MSTR? MSTR is likely to be diluted by an unknown amount over an unknown time period versus EXACT coin emission dilution. I would take the BTC, right? Shouldn’t MSTR holders be selling and buying coin until the above is $153/share? I’m confused.
Well, no, that's not the right metric exactly. For example, Apple's asset value/share is less than 5% the price/share. Nobody chooses to buy Apple stock based on this metric. The value proposition of buying Apple stock is that Apple will keep building and selling new crap to improve on the share price. There is no right metric to predict this. Similarly, the value proposition of MSTR isn't its current asset value; it's the expectation that the share price will increase. The difference, of course, is that what drives MSTR price isn't based on what they will be building and selling. Instead, it's almost entirely based on the expectation that future investors will fund the increase of BTC/share of previous investors. All that said, I would suggest sticking to buying coin. There's no telling when the stream of future investors willing to fund the increase of BTC/shares of previous investors might end; but, a severe bear market would almost certainly trigger it.
You value different companies different ways. I think MSTR is justified some premium, because they have leveraged Bitcoin, not just Bitcoin. But maybe not this much premium. If undervalued, do buybacks. If it's over valued, they should issue shares and dilute it. Not leverage harder! It's completely unsustainable, and I don't trust them to reign it back if Bitcoin keeps pumping. So I think they will be in dire straits come a bear market. Not that their current position is that bad.
Also one is captured in a security - massively taxed……If BTC becomes legal tender then no cap gains. HODL til legal tender
Yes. Then spend on Bentleys and Cocaine.
That'll make some investors panic, but MSTR doesn't care, it can keep issuing debt and keep buying BTC, and the BTC could always be returned to shareholders or employed in some other fashion. No way it "doesn't survive."
OK, so if BTC rallies to two hundred something thousand, MSTR cost basis is ~150k, and then a bear market starts and they decide to "buy the dip" with more debt pushing cost basis even higher to try and prop up BTC, and all of a sudden you start getting FUD pushing price lower... Now the 2026/27 maturities are coming up, you've got margin calls and forced liquidations up your ass and you've popped the bubble. "Investors panic" is a problem if you're raising money through debt. You cannot tell them to suck it up like you can to shareholders.
I'm not sure how they finance and manage the debt and what the exact limitations are, but I see no reason why they would be forced to liquidate their bitcoin to cover their debts, and that's what your statement is dependent on.
This is not true, Saylor is selling more "shitcoin" bonds and "he" is buying more bitcoin.
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