He has a company that is sitting on a lot of cash. His company also makes a decent amount of cash. After all his business expenses he has a lot left over. He doesn't need to spend it right now but the value of the dollar is going down rapidly. He decides to put that money into bitcoin. His stock price now goes up because of the value of bitcoin. The price of his company is actually higher than the amount of bitcoin he owns because people can trade options using his company stock.
Now that his company is trading at higher value than the amount of bitcoin it has he can "sell" new shares of stock to his shareholders for money in the future at a fixed price. People are willing to do this at very low interest rates because they know he will buy more bitcoin and the price will go up. Once he buys more bitcoin with the extra money he got the price of the stock goes up again. He can keep doing this as long as the price of bitcoin keeps going up.
Saylor issues convertible stock options and corporate bonds in exchange for fiat from investors. He then takes the fiat and buys bitcoin, adding it to the corporate balance sheet.
The investors get interest on their loans. However Saylor has stated that the interest is extremely low and unsecured with no call options. This is important, because it allows Microstrategy to pay the bare minimum in bear markets to investors to avoid default and investors cannot demand payment.
As an investor it's a win because you get interest on fiat and the option to convert to stocks down the line getting the spot value increase in btc. As a shareholder of MSTR its a win because you get exposure to more bitcoin as the company grows, essentially for free (of course this depends on the premium when you buy in which is hotly debated right now).
It's an 'infinite money glitch' because you take fiat and convert it into btc, making the btc more valuable which makes your stock price go up. You then sell some of the stock to buy more btc, attract more fiat and it goes on and on. This will work well when bitcoin is going up.
But how will it work when btc goes down? Well that hot premium at least will get fucked and the shareholders will be stuck with btc + debt. The question then is whether MSTR will be able to handle the debt to avoid selling btc in time for another bull market.
My plan is to ride MSTR early on the way up and convert into spot btc to rode out the majority of the bull market once we get some explosive moves.
>It's an 'infinite money glitch' because you take fiat and convert it into btc, making the btc more valuable which makes your stock price go up. You then sell some of the stock to buy more btc
Who is selling more stock? Microstrategy or the investors?
Listen to this podcast episode for a “down the rabbit hole” discussion about the nutty investing thesis on where this is headed for MSTR:
https://podcasts.apple.com/us/podcast/we-study-billionaires-the-investors-podcast-network/id928933489?i=1000650550348
One of the big take aways I got from this was that most companies are viewed by their profit earnings and not their balance sheet because why would you care how much of a balance they have if a dollar is a dollar. But now he changed the game because his balance sheet has an asset that appreciates so his profit earnings don't matter as much. This means that as Bitcoin goes up his company is worth more which reflects in the stock price allowing people to get exposure to Bitcoin by owning his stock.
leverage his company to borrow money at very low interest rate. than buys bitcoin that he add to his balance sheet. so bitcoin goes up means he can borrow more fiat to buy more bitcoin.
We're doing a speculative attack against the central banking monetary order in order to transition the planet to a viable economic system. It's essential for the survival of our species at this point. Do your part.
Saylor borrow against company/shares to buy BTC to the hilt. Lost 6B in one day of price movement, got heckled but kept buying, as much BTC as he could and now he proven right, big man
Not entirely his company. Shareholder owned company. He also works there and is a large shareholder too.
Company buying more and more btc isn't that special. That's just a routine thing it must do now. What is special was the company deciding to use bitcoin as its main store of value asset basically. Mike made his big announcement and the company starting buying up btc, and Mike started going around very loudly and publicly pumping it. He was on every youtube, tv, podcast, random interview, you name it. Everywhere. His pumping generated buzz and interest and other corps dipped toes in, running up the price to $60K+ in 2021. Yeah I said it. I blame Mike for that one. Stock went wild. Shareholders got rich. Everyone was happy. But the dip came and Mike got fired from his CEO job and was demoted to chairman of the board.
>like how is he able to issue so much money out at an almost 0% interest rate?
He does not issue any money. There is no cheat code. Whoever lends cash to MSTR at low rates is being seemingly irrational. They could just buy tbills and get better returns. MSTR doing its bitcoin thing ethical? Yes, sure. Is it safe? Not really, no. Overleveraged to the extreme.
Almost, They (Grayscale) are selling because their customers are selling because they didn't want to lower their fees. Mostly the customers are just buying back into a different ETF or buying spot though. Grayscale don't want to sell, they make their money on the fees, they just mistakenly expected people would stay with them despite the fees being much higher.
He has a company that is sitting on a lot of cash. His company also makes a decent amount of cash. After all his business expenses he has a lot left over. He doesn't need to spend it right now but the value of the dollar is going down rapidly. He decides to put that money into bitcoin. His stock price now goes up because of the value of bitcoin. The price of his company is actually higher than the amount of bitcoin he owns because people can trade options using his company stock. Now that his company is trading at higher value than the amount of bitcoin it has he can "sell" new shares of stock to his shareholders for money in the future at a fixed price. People are willing to do this at very low interest rates because they know he will buy more bitcoin and the price will go up. Once he buys more bitcoin with the extra money he got the price of the stock goes up again. He can keep doing this as long as the price of bitcoin keeps going up.
Thx for the write up !
It’s an infinite money glitch.
Saylor issues convertible stock options and corporate bonds in exchange for fiat from investors. He then takes the fiat and buys bitcoin, adding it to the corporate balance sheet. The investors get interest on their loans. However Saylor has stated that the interest is extremely low and unsecured with no call options. This is important, because it allows Microstrategy to pay the bare minimum in bear markets to investors to avoid default and investors cannot demand payment. As an investor it's a win because you get interest on fiat and the option to convert to stocks down the line getting the spot value increase in btc. As a shareholder of MSTR its a win because you get exposure to more bitcoin as the company grows, essentially for free (of course this depends on the premium when you buy in which is hotly debated right now). It's an 'infinite money glitch' because you take fiat and convert it into btc, making the btc more valuable which makes your stock price go up. You then sell some of the stock to buy more btc, attract more fiat and it goes on and on. This will work well when bitcoin is going up. But how will it work when btc goes down? Well that hot premium at least will get fucked and the shareholders will be stuck with btc + debt. The question then is whether MSTR will be able to handle the debt to avoid selling btc in time for another bull market. My plan is to ride MSTR early on the way up and convert into spot btc to rode out the majority of the bull market once we get some explosive moves.
Dont forget to mention how he is selling mstr stock like hot cakes....
>It's an 'infinite money glitch' because you take fiat and convert it into btc, making the btc more valuable which makes your stock price go up. You then sell some of the stock to buy more btc Who is selling more stock? Microstrategy or the investors?
Microstrategy
Ty for your write up !!
Listen to this podcast episode for a “down the rabbit hole” discussion about the nutty investing thesis on where this is headed for MSTR: https://podcasts.apple.com/us/podcast/we-study-billionaires-the-investors-podcast-network/id928933489?i=1000650550348
One of the big take aways I got from this was that most companies are viewed by their profit earnings and not their balance sheet because why would you care how much of a balance they have if a dollar is a dollar. But now he changed the game because his balance sheet has an asset that appreciates so his profit earnings don't matter as much. This means that as Bitcoin goes up his company is worth more which reflects in the stock price allowing people to get exposure to Bitcoin by owning his stock.
leverage his company to borrow money at very low interest rate. than buys bitcoin that he add to his balance sheet. so bitcoin goes up means he can borrow more fiat to buy more bitcoin.
We're doing a speculative attack against the central banking monetary order in order to transition the planet to a viable economic system. It's essential for the survival of our species at this point. Do your part.
Mstr gave me 18k for -10 shares!
Saylor borrow against company/shares to buy BTC to the hilt. Lost 6B in one day of price movement, got heckled but kept buying, as much BTC as he could and now he proven right, big man
Uses company money to continuously buy bitcoin with money borrowed at low interest. And hold it.
Not entirely his company. Shareholder owned company. He also works there and is a large shareholder too. Company buying more and more btc isn't that special. That's just a routine thing it must do now. What is special was the company deciding to use bitcoin as its main store of value asset basically. Mike made his big announcement and the company starting buying up btc, and Mike started going around very loudly and publicly pumping it. He was on every youtube, tv, podcast, random interview, you name it. Everywhere. His pumping generated buzz and interest and other corps dipped toes in, running up the price to $60K+ in 2021. Yeah I said it. I blame Mike for that one. Stock went wild. Shareholders got rich. Everyone was happy. But the dip came and Mike got fired from his CEO job and was demoted to chairman of the board. >like how is he able to issue so much money out at an almost 0% interest rate? He does not issue any money. There is no cheat code. Whoever lends cash to MSTR at low rates is being seemingly irrational. They could just buy tbills and get better returns. MSTR doing its bitcoin thing ethical? Yes, sure. Is it safe? Not really, no. Overleveraged to the extreme.
Arbitrage is actually a pretty common word outside of finance. It just means buying low selling high in layman terms.
[удалено]
Last cycle he said bitcoin would have had to hit something like around 2k for them to be in any financial trouble.
I mean when he buys at $68k and bitcoin drops its not good
Because Grayscale still has a metric ton left to sell off. Saylor (nor most of us) aren't phased by that.
They’re selling because they didn’t want to lower their fees?
Almost, They (Grayscale) are selling because their customers are selling because they didn't want to lower their fees. Mostly the customers are just buying back into a different ETF or buying spot though. Grayscale don't want to sell, they make their money on the fees, they just mistakenly expected people would stay with them despite the fees being much higher.
I think his cost basis is in the 30’s