Oddbean

MSTR did not find a glitch, they are just taking on risk, which works as long as there isn't a massive crash Bitcoin does have a way of flushing out massive amounts of leverage. Not saying it will happen, but it CAN happen To summarize: - convertible notes: give option to debt holders to convert into shares, diluting current share holders. But if it doesn't pump, can only pay back by selling BTC. - straight debt: mstr doesn't have enough income to pay back all debt holders, so they can become a forced seller of coins or shares (dilution) during a dump of BTC or mstr stonk - their force sells can dump the price further creating a death loop of even more selling Yes it looks genius after a huge pump but it could potentially be lights out if we crash 70% But we probably won't

A very sensible take. Many people tend to idolize Saylor, and while I admire what he’s doing, it’s essential to remain clear-headed and cautious about the risks he’s taking. Admiration shouldn’t replace critical evaluation.

MSTR survived the last bear market. Lots & lots of calls for liquidation & doomsday then. I wonder if Saylor knows about the BTC cycles? He better study up. 😅 Joking aside. MSTR is fucked long term.

Many say the amount of Bitcoin per share continues to increase but I don't believe this takes into account the convertible notes. Once converted, this levels back out again. Granted, in an inflationary environment, debt becomes cheaper over time. Using leverage to increase BTC holdings can be a positive move for anyone, company or individual. The question is, when and how does that debt get called? Benjamin Graham often said that worst losses were those when one was forced to sell. If you live by someone else's timeline, you will lose, eventually.

Mstr is fine even if we dump back to $3k. They carry close-to-zero cost obligations on their debt. The premium and stock price will vary, and probably converge close to natural real interest rate over the looong run, but they can't really go bankrupt as long as btc exists.

Their debt expires and they're paying about $60m per year in interest Not saying they'll go bankrupt, my main point is the high reward comes with high risk, meaning the value of your mstr shares can get crushed way harder than btc

THERE ARE NO SOLUTIONS, ONLY TRADEOFFS MSTR has created a set of circular incentives using Bitcoin where everyone involved wins. It's truly beautiful to behold & so very rare in fiat land. The only loser is the fiat currency earner & saver. If Bitcoin crashes, the share price will suffer but nothing will collapse. The duration of these bonds is longer than a Bitcoin cycle & not tied to the share price. I don't see him needing to sell a little of their stack to pay them off. At worst they will reissue the debt with slightly less favourable terms. It is higher risk than sats in cold storage but so is everything in fiat land. If I had value stuck in fiat land then I'd use MSTR but my retirement fund is 100% allocated to Bitcoin since 2020. I don't need to take on this risk. The biggest risk is basically the 6102 attack, same as the ETFs. It's unlikely occur but devastating to all, if it does. Even those with sats in cold storage will likely be eating 2min ramen for a while. Should you sell your sats to buy MSTR shares? I'd tell you no, just keep your sats & watch MSTR pump their value. If you're retirement fund can only buy the ETFs or MSTR, I'd probably go with MSTR.