Oddbean new post about login | logout As I understand it: the simplified version of why you would pay a premium for MSTR compared to the underlying BTC is the expectation that the company will continue to increase the BTC per MSTR share; thus, eventually turning the initial premium you paid into a discount for the increased amount of BTC it represents. That sounds like a great deal, but how does the company increase the BTC per MSTR share?: It issues new shares at the premium price so that it can buy even more BTC at the market price; thus increasing the BTC per share ratio. And/or the company sells convertible bonds that effectively accomplishes the same thing - just with leverage on a longer timescale. In other words, if the flow of investors to buy new shares were ever to dry up, the later investors who hadn't yet seen their initial premium price turn into a discount price never will. This sounds like a ponzi scheme that must eventually run out of the new investors necessary to keep it going. It just happens to be a legal ponzi scheme without any apparent fraud or deception. Just make sure to go in with your eyes wide open to these realities. "Buyer beware, Freaks"
I wouldn't call it a ponzi, but indeed at a certain point stock demand will dry up, bye bye expected yields, and the stock will be highly overpriced. Stonks are forward looking. Whoever can model the rate change of BTC yield best wins.
MSTR is trading at a premium to its current NAV but at a discount to its future NAV.
VanEck spaces 11/19 🌼 https://m.primal.net/McFY.mp4
When you can make a publicly-traded business out of using capital markets to attack the international reserve currency, it might be the end game. nostr:note1gnev3t5gh2jph9knpzwjphkq5fp0nnstg06h37y2qd4fv53mq7qsd54ql0
Hugo Stinnes called. He wants his playbook back.
This kind of endgame? https://primal.net/e/note1f8q9q5ddfjcge7w023q9hwvspue2l8tacvsay9q7lm5yrsux86psx6qw2j
If the flow of investors to buy new shares of any publicly traded company dries up that company is in trouble. If bitcoin keeps doing what it’s does (and it most likely will) it’s reasonable to expect that a company diligently executing a long corporate treasury strategy will also succeed and be handsomely rewarded. That said. If you own no corn and mostly or all MSTR, congratulations, you’ve chosen your stocks wisely, but you also own a publicly traded equity in layers of counterparty custodianship. You own no UTXOs, you can’t send it to family in another country, you can’t fight censorship with it, you can’t spin up a lightning channel with it or use it in a fedimint, or inscribe dick picks on it (would refrain from that one, but you do you) and you sure as shit cannot zap hilarious memes with it.
Absolutely agree. Though there is a limit to how long bitcoin can keep doing what it's doing. Some people think that limit is when it demonetizes gold. Some people - like Saylor - believe it will demonetize most other savings vehicles as well. For all anyone really knows, it will be sooner rather than later. I happen to believe it will be later rather than sooner. My point, though, is whenever that limit does get realized, there will be an awful lot of people who bought expensive MSTR too late to ever get rewarded for it; and would have been much better off just buying BTC at market place. (in addition to your point about them not owning UTXOs).
For sure, yes. Also, if bitcoin follows its historic cycles and dumps in 2026/2027 and you bought near or at the leveraged top of MSTR, it’s a more painful ride down, and you could have waited and potentially bought at a big discount versus a premium.