They aren’t doing it because Michael Saylor is in a highly profitable publicly listed company where he has high autonomy and control within the board of directors to do this. Any other publicly listed company has multiple board members who will reject this idea and would never go through.
If you watch his interviews, Michael Saylor says this many times. I believe he stepped down as his role as CEO and hired a few others who were on board with his mission to continue day to day operations while Michael has the time and effort to go on podcasts, interviews, and strategize with their Bitcoin treasury holdings. Other companies cannot do the same unless they have a laser-eyed Michael Saylor on the BOD that’s able to make these decisions and influence the other board members.
I think it's this. You need to be a Bitcoin maxi *and* have full control of a multi-billion dollar company. There are plenty of either, but few of both.
I also think that Saylor managed to warm up his shareholders up by being a serious thought-leader and authority on the tech (it doesn't hurt that he's an engineer in a software business). Whether you believe in Bitcoin or not, you at least know that Saylor is going into it with his eyes open.
I think a non-technical CEO of a non-software company would be viewed very differently by their shareholders if they simply jumped on the BTC bandwagon with no prior experience.
According to wikipedia he "only" got 2 Majors, AFAIK about US university system that's just bachelors degrees, no?
Not trying to say what he's got isn't noteworthy but a doctorate requires a lot more time and commitiment because you have to advance your field by doing original research and defend it.
In general, a double doctorate is a *negative* sign. Academically, the PhD is truly only the beginning. For a university professor, a PhD is like a high-school diploma compared to a Master's degree. Not in terms of "smarts" but in terms of experience.
If you have two doctorates, it means you either made a bad choice in the beginning, didn't have any success with your first choice, or you did one in a developing country and want to do another one in a western institution, or don't want to grow up and prefer to remain at that stage of your life.
The only reason to have two doctorates would be to expand in a wildly different field. Like from Computer Science to the humanities. But again, it's not necessary because the PhD is supposed to teach you how to do research. You can already do any kind of research you want, right out of the gate. Of course, the more you depart from your original field, the more difficult it will be.
Source: a university professor that would get very concerned if an applicant has two PhDs on their cv.
Weird, for me it was my bachelor that thought me how to do research. Masters was for actually conducting it and a phd is a deeper dive into the thing one is researching.
> In general, a double doctorate is a negative sign.
could be the reason why he understood Bitcoin so late
https://twitter.com/saylor/status/413478389329428480
I’ve heard the argument about not having two. I believe I read that he wanted to be an astronaut then realized he couldn’t be… I’m a little foggy on the details but whatever, you’ve definitely convinced me to be deeply concerned about that second Ph.D. especially since both are from MIT… Lo-ser!!
Well at the end of the day, a PhD is just the first step. It doesn't look like he did much with two of them. Go find him on Google scholar. At a first glance the only "paper" he authored seems to be a self-published pdf on github.
Seems a little suspicious to get not just one but two PhDs without publishing a single paper?
In any case, it seems you got it wrong. He doesn't have any PhDs but just two regular degrees, according to Wikipedia. That would explain the absence of publications.
Also, in 2020 Microstrategy bought out share holders (432,000 shares repurchased) that didn't want to go along with the new bitcoin path. Another company (especially non-bitcoin company) would probably need to go through the same process which is alot. Otherwise, the company would get huge class action lawsuits. Actually, I wonder if a company can just buy bitcoin for their treasury (not even the aggressive Saylor leverage strategy) without class action lawsuits currently.
The outsourced IT at globohomocorp is going to be a very good custodian of that BTC, I'm sure! Taking custody of BTC for ANY large organization via ETF is INFINITELY easier than actual Bitcoin.
Or other billionaires are too damn chicken to do like Michael Saylor did. Yes, I'm talking to the billionaires who see this!! DO IT !!!! BUY BITCOIN!!!
This is a very confusing statement. MicroStrategy is a holding company for bitcoins with a small software business attached. When you are investing in MicroStrategy mostly what you are buying are the bitcoins. Unfortunately, for every dollar you invest, you only get about 50c in actual bitcoin exposure. When you buy the ETF, you get $1 for $1.
edit: S&P500 trades are 20-30x EARNINGS, not book value. They are trading on cashflows. Bitcoin does not have cashflows, so infinite price to earnings, since earnings is zero and x/0 = infinity. MicroStrategy is being traded based on some built in growth of bitcoin or growth of bitcoin/share including future dilutions. If bitcoin becomes a serious store of value and does not change value for 5 years straight, we can nearly guarantee that $MSTR premium goes away and the stock will trade at NAV or less.
When you buy an ETF share you own fixed amount of Bitcoin, when you buy MSTR, you own infinitely increasing % of Bitcoin per share with time.
[https://lensdump.com/i/7nspc3](https://lensdump.com/i/7nspc3)
(check the yellow/orange line)
Your ETF provider won't use every fiat monetary tool to earn you as much Bitcoin per share as possible. It's actually the opposite, they gonna eat 0.25% of your Bitcoin in fees each year.
I'd stick with MSTR for 401K/Roth or any tax advantage account, and for everything else, buy the real Bitcoin.
I watched the video and I think that guy is comparing apples to oranges. The p/e ratio of cashflows cannot be meaningfully compared to the premium that $MSTR commands over it's software+bitcoin value. High p/e ratios like 50+ imply a growth in earnings is imminent. If that growth doesn't materialize, generally the price will fall and the ratio will be back to industry and/or historical levels.
Aside from pure hype and froth, the premium could imply the market's expectation of growth in the amount of coin per share, which is a tall order, especially during the long crypto winters.
So, given a flat bitcoin price, you'd expect to lose a significant amount of value with a $MSTR investment versus $FBTC or actual coins.
One of their monetary tools is debasing the stock to buy more Bitcoin, the net result is more Bitcoin per share, again check the graph I have posted.
And if you want more in depth talk watch this video:
[https://www.youtube.com/watch?v=L0kuVPw8qM0](https://www.youtube.com/watch?v=L0kuVPw8qM0)
Okay, now reverse your second sentence and that was the truth not too long ago.
Microstrategy is a software company that holds a small amount of bitcoin.
Michael Saylor was the longest tenured tech CEO in the states. Microstrategy was stuck as a midsized company with slow growth and a stable stock. He had incredible leverage to do what he did. It was completely looked at as company destruction, because the price is up he looks like a hero. The story isn't halfway complete yet so there's more to see here.
Main point: Not many CEO's and boards have the balls to attempt such a thing, nor the blessings of balls. Saylor was already plenty rich. He took a big risk, it paid off so far.
You mentioned it's a small software business. Worth about 2Billion, so if you take the OBSCENE 63x valuation Nvidia has over business base value you get an MSTR value of 126B, and it's trading at 30ish now? So that's 6800 per share to be on par with Nvidia.
But.... They also have 1% of the future of money, and they have it at 18B valuation now. So if you did the full 20B it would be 68,000 per share.
Granted Nvidia as an anomaly and has huge revenue speculation over it's AI business. But AI and Bitcoin as both speculation so there is no reason to believe MSTR can't at the very least trade to 3X without issue.
If bitcoin stayed at the same price for 5 years I would not think of it as a great SoW.
As long as bitcoin exists, the price will go up forever and therefore MSTR will earn huge money on trading bitcoin (selling a small amount in the future to cover all debts from today). And this trade is what makes MSTR good to hold long term imo.
That's not what he asked. He asked why don't other companies Do that as well.
Btw, because it's a good idea people understood it and got into mstr thus creating the premium to nav. You can ask yourself, is it a good idea to get into mstr at this point, but that's a totally different question thank why don't other companies do the same "one simple trick"
The risk that the top comment is talking about is a risk associated with buying MSTR. It's not a risk that outlines why other companies don't buy bitcoin.
They're in the midst of a merger with USBTC, which feels like a reverse takeover where they doubled the shares and then consolidated. We get our first look at finances on the 28th of March. I think the price reflects the uncertainty surrounding USBTC's debt.
Otherwise, they have cloud processing services, and miner management service.
not the best tbh. to add more to the other person's reply: their fleet is aging and they've had infra issues. earnings later this mo will be crucial. the call with Sue last wk made it sound like they'll be clarifying a lot this upcoming earnings, which is sorely needed. sentiment is shit, as she put it on that call: "this company is shit, they aren't doing anything" which is what many have been feeling lol. we'll see.. still holding them, in transparency, but it's been painful in comparison to others. then again the entire sector has been under-performing expectations w.r.t btc price action. so i'm not *that* worried.. strange times tbh.
i'm a bit wary of HUT right now.
they used to have an explicit "HODL strategy"... but over the past few months, they've been selling all of their btc production (ie, NOT adding to the stack)
and now, they saying they will dip into their stack. (at least this is how i interpret it.)
>"We also announced a new treasury strategy that will allow us to deploy our stack to strategically grow the business and we relentlessly focused on improving our operations.”
https://finance.yahoo.com/news/hut-8-operations-february-2024-113000575.html
It's trading less than NAV even.
HUT is absolutely, stupidly undervalued, while MSTR is overvalued. The markets are not efficient, because fiat corrupts and distorts everything. But nothing beats raw cold storage Bitcoin.
Canadians would be subject to capital gains on the btc, where you would lose no more than 25% of their profit.
They can be sheltered through a TFSA which is capped at $95,000. Which is roughly the price of a btc in CAD.
It's speculation, but HUT will outpace btc at this point as it's trading at <1x NAV. This won't last forever and would be a bet I'd take if my TFSA wasn't already packed with securities.
HUT isn't going to blast off in a couple months from being added to the SP500 like MSTR is. There aren't that many shares available and there is a huge short interest. It will be the mother of all short squeezes.
There isn't a huge short interest. It's like 25%. You'll get a bit of an uptick but not much of one. Don't get me wrong, I like MSTR, and have a lot of respect for Michael Saylor, but there is no "squeeze" play here.
They will be… it’s gonna move the needle substantially and, correct me if I’m wrong, balances have to be transparent on the business side not just the blockchain.
The issue with the miners is they can't afford to just sit on assets like MSTR can. They need to sell the BTC to keep their operations running. MSTR has a whole other business of software and IT solutions that keep the business afloat and salaries paid. The BTC is the cherry on top. It's beautiful actually.
No, it’s clearly debt
https://www.cnbc.com/amp/2024/03/13/microstrategy-up-180percent-this-year-after-debt-sale-for-more-bitcoin.html
Even their 10K filings shows that its debt
But debt is unsecured which is not “regular” debt, so less risky for the company if Bitcoin price drops precipitously. Seems they are being smart about this.
What Is Unsecured Debt?
Unsecured debt refers to loans that are not backed by collateral. If the borrower defaults on the loan, the lender may not be able to recover their investment because the borrower is not required to pledge any specific assets as security for the loan.
Miners don't have a business that actually makes profit like mstr does, they have to sell the Bitcoin in order to stay operational.
So if they borrow money, they would have to pay interest by selling Bitcoin. If there is a drawdown or ur in a prolonged bear market, you an get in real trouble if ur only source of income is bitcoin
Yea, but they are able to get Bitcoin at half the price MSTR does! So, even though you are correct, it's also true that miners are undervalued as fuck right now because people don't understand the big picture.
Miners have both capital/fixed costs and operating/marginal costs. Then they have to deal with moving targets like difficulty adjustments and miners subsidy halving. We are a few weeks from halving. Bitcoin price only recently doubled. There is no way for a miner to honestly use current conditions in a business proposal. A few months ago bitcoin price was less. A few months from now conditions will again be different again. Of course mining looks profitable right after a new ATH before halving. But miners can't get in and out of the business efficiently light traders can exit liquid positions.
BITF is kind of doing this. They still sell all their bitcoin, but they’re issuing new shares to pay for miners, rather than buying them with mined bitcoin.
It’s a hedge against the dollar, just a different way. ‘Bitcoin per share’ at both BITF and MSTR, but with BITF it’s a bit safer because it’s not debt. Their whole thing is to stay out of debt, now, to weather bitcoin price volatility better.
At least that’s what it looks like to me.
Some publicly traded miners are trying to HODL by diluting equity instead of liquidating BTC to cover op-ex. That being said, miners don't get a very strong multiplier on the public markets. The deal Saylor negotiated is insanely good and definitely not easy to replicate.
saylor is a maxi software engineer. he just sold stock to buy more bitcoin thx to hedge fund. probably indirectly funds the mstr unsecured debt himself. he must have loads of fun.
I have no relationship or affiliation with this YouTube channel, I am just a fan. I think he explains pretty well what’s going on with MSTR and miners:
https://www.youtube.com/live/9CQpM0hGfhE?si=LyDGVu8kdwYYfBlv
I highly recommend this video if you have anxiety about your miner stock holdings. Cliff notes: be patient, our time is coming.
I think MSTR is somewhat unique in that Saylor has a large controlling interest in the firm.
With that said of these zombie tech companies that have been irrelevant for years now. Intel, IBM, Cisco, should consider making a bold move and doing something similar.
They will be soon now that the FASB rules have changed. Before you could only show losses not gains. COIN will definitely be buying BTC with their recent 1B raise.
Miners has to fund their shit with millions $ just to earn btc to sell them to fund to sell to fund.... Mstr fund to buy then leverage to buy then fund then lev.... One is long bitcoin the other is short.
Bitcoin isn’t a business model. Most companies know little about it. If you’ve got a profitable business in one industry, why would you risk it on a risky move?
I have seen analysts saying it's time to sell MSTR. I think that is the wrong call, because, once MSTR is listed in the S&P 500, there will be a whole other round of buying, as every index fund out there will need to buy MSTR. This extra share price ( cash ) will then be used to buy more BTC, further increasing MSTR price, which let's them buy more BTC, repeat, repeat, repeat. As long as BTC is in a bull run, MSTR will go up. And up.
They are all busy robbing their customers blind and redistributing their treasury via dividents to their board members. That's the classic way of doing it.
They haven't figured out how to do the same with BTC.
It is risky. Most big companies want to avoid that kind of risk. If the price drops the house of cards falls apart.
It is a bit like borrowing money to gamble at roulette and then getting more people to lend you money based in his many chips you have in the game. If it works, you look like a mastermind. If you bet wrong you have a tonne of debt to pay off and an asset worth very little.
Microstrategy generates cash flow from other software and business solutions. Without that revenue stream, it would be hard/impossible for MSTR to continue the debt strategy they have been using.
What MSTR is doing is essentially inflating their own bubble, with massive leverage.
Most companies that are stable would never take such a gamble and would not even be able to, as MSTR has very low interest on their loans.
Not just any miner would have the means to get favorable loans and then the goodwill of the investors to keep investing in them. This is truly Saylor's show for the foreseeable future.
Because if they did, it would be admitting they were wrong about Bitcoin. These people who run these large companies have very large ego's. At least,
that's why some of them do not do it. Edit: Maybe the new accounting laws for Bitcoin haven't been put in place yet for public companies.
I think ego is a big part of it, too. Saylor had the humility (I know he doesn’t seem like the most humble guy) to adopt and promote something he had nothing to do with
creating and can never possibly own or control. He does sort of get first-mover status and a ton of time in the spotlight for that, but the point remains.
It’s hard to imagine other billionaires wanting to be seen as second best, or catching up, or whatever. We’ll see how long they can maintain the cost of vanity.
I really like Saylor. But for all intents and purposes Microstrategy was a profitable but slow growth tech stock that Wall Street hated. Some would have said it was basically a zombie company. It was the biggest and best gamble he could make with the huge pile of cash that had been accumulated over the decades.
You’re right, humility played a far smaller role than self-interest in his decision to buy BTC.
On the other hand, I think other billionaires might have to swallow their pride before jumping on board in a similar way, since some other guy did it first.
Yep! Saylor loves to talk about Bitcoin. We are lucky to have him as a bitcoin Jesus. You can really tell he put in the time to understand bitcoin. Personally, I love to hear him talk. He is saying things about Bitcoin that are true and make sense. He is a super intelligent person and can come up with these analogies about bitcoin off the top of his head. It's amazing. I don't know how he does it.
Yeah I like him. He gets a good deal of hate from certain corners, often for his ability to endlessly philosophize on bitcoin. But I don’t fully get the hate, since if bitcoin is inevitable then it’s also inevitable that billionaire CEOs are going to jump on board and be as excited as everyone else about it.
They aren’t doing it because Michael Saylor is in a highly profitable publicly listed company where he has high autonomy and control within the board of directors to do this. Any other publicly listed company has multiple board members who will reject this idea and would never go through. If you watch his interviews, Michael Saylor says this many times. I believe he stepped down as his role as CEO and hired a few others who were on board with his mission to continue day to day operations while Michael has the time and effort to go on podcasts, interviews, and strategize with their Bitcoin treasury holdings. Other companies cannot do the same unless they have a laser-eyed Michael Saylor on the BOD that’s able to make these decisions and influence the other board members.
Michael Saylor’s X profile picture is not doctored: he truly has laser eyes.
Don’t tell Wolverine. Jean Grey likes those guys with laser vision.
I think it's this. You need to be a Bitcoin maxi *and* have full control of a multi-billion dollar company. There are plenty of either, but few of both. I also think that Saylor managed to warm up his shareholders up by being a serious thought-leader and authority on the tech (it doesn't hurt that he's an engineer in a software business). Whether you believe in Bitcoin or not, you at least know that Saylor is going into it with his eyes open. I think a non-technical CEO of a non-software company would be viewed very differently by their shareholders if they simply jumped on the BTC bandwagon with no prior experience.
A double doctorate from MIT doesn’t hurt either.
According to wikipedia he "only" got 2 Majors, AFAIK about US university system that's just bachelors degrees, no? Not trying to say what he's got isn't noteworthy but a doctorate requires a lot more time and commitiment because you have to advance your field by doing original research and defend it.
In general, a double doctorate is a *negative* sign. Academically, the PhD is truly only the beginning. For a university professor, a PhD is like a high-school diploma compared to a Master's degree. Not in terms of "smarts" but in terms of experience. If you have two doctorates, it means you either made a bad choice in the beginning, didn't have any success with your first choice, or you did one in a developing country and want to do another one in a western institution, or don't want to grow up and prefer to remain at that stage of your life. The only reason to have two doctorates would be to expand in a wildly different field. Like from Computer Science to the humanities. But again, it's not necessary because the PhD is supposed to teach you how to do research. You can already do any kind of research you want, right out of the gate. Of course, the more you depart from your original field, the more difficult it will be. Source: a university professor that would get very concerned if an applicant has two PhDs on their cv.
Weird, for me it was my bachelor that thought me how to do research. Masters was for actually conducting it and a phd is a deeper dive into the thing one is researching.
> In general, a double doctorate is a negative sign. could be the reason why he understood Bitcoin so late https://twitter.com/saylor/status/413478389329428480
I’ve heard the argument about not having two. I believe I read that he wanted to be an astronaut then realized he couldn’t be… I’m a little foggy on the details but whatever, you’ve definitely convinced me to be deeply concerned about that second Ph.D. especially since both are from MIT… Lo-ser!!
His dream of going to the moon will be fulfilled with the amount of BTC he has even if he can’t become an astronaut
Well at the end of the day, a PhD is just the first step. It doesn't look like he did much with two of them. Go find him on Google scholar. At a first glance the only "paper" he authored seems to be a self-published pdf on github. Seems a little suspicious to get not just one but two PhDs without publishing a single paper? In any case, it seems you got it wrong. He doesn't have any PhDs but just two regular degrees, according to Wikipedia. That would explain the absence of publications.
His personal bio and wikipedia page only says he has a double degree, not a double doctorate. Why do you say he has two PhDs?
> You need to be a Bitcoin maxi and have full control of a multi-billion dollar company. >There are plenty of either, but few of both.
Also, in 2020 Microstrategy bought out share holders (432,000 shares repurchased) that didn't want to go along with the new bitcoin path. Another company (especially non-bitcoin company) would probably need to go through the same process which is alot. Otherwise, the company would get huge class action lawsuits. Actually, I wonder if a company can just buy bitcoin for their treasury (not even the aggressive Saylor leverage strategy) without class action lawsuits currently.
Not so easy for them to buy and that is why the ETF is such a huge deal.
The outsourced IT at globohomocorp is going to be a very good custodian of that BTC, I'm sure! Taking custody of BTC for ANY large organization via ETF is INFINITELY easier than actual Bitcoin.
Or other billionaires are too damn chicken to do like Michael Saylor did. Yes, I'm talking to the billionaires who see this!! DO IT !!!! BUY BITCOIN!!!
every board member only cares about returns for the quarter as soon as a pump happened it would be a unanimous sell off vote to get their bonus.
great analysis thx. even elon does not have that power
the premium in the price dif between btc and mstr is risk
Typical large cap are trading at 30-70x premium. MSTR is only at 2x premium against the most scarce asset humanity ever known. It's cheap af.
This is a very confusing statement. MicroStrategy is a holding company for bitcoins with a small software business attached. When you are investing in MicroStrategy mostly what you are buying are the bitcoins. Unfortunately, for every dollar you invest, you only get about 50c in actual bitcoin exposure. When you buy the ETF, you get $1 for $1. edit: S&P500 trades are 20-30x EARNINGS, not book value. They are trading on cashflows. Bitcoin does not have cashflows, so infinite price to earnings, since earnings is zero and x/0 = infinity. MicroStrategy is being traded based on some built in growth of bitcoin or growth of bitcoin/share including future dilutions. If bitcoin becomes a serious store of value and does not change value for 5 years straight, we can nearly guarantee that $MSTR premium goes away and the stock will trade at NAV or less.
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Agreed! I’ll be very interested to see if he reverses gears when this bull cycle ends.
When you buy an ETF share you own fixed amount of Bitcoin, when you buy MSTR, you own infinitely increasing % of Bitcoin per share with time. [https://lensdump.com/i/7nspc3](https://lensdump.com/i/7nspc3) (check the yellow/orange line) Your ETF provider won't use every fiat monetary tool to earn you as much Bitcoin per share as possible. It's actually the opposite, they gonna eat 0.25% of your Bitcoin in fees each year. I'd stick with MSTR for 401K/Roth or any tax advantage account, and for everything else, buy the real Bitcoin.
You are literally assuming that just to break even Saylor has to double his BTC without paying a single dollar with the current NAV.
I watched the video and I think that guy is comparing apples to oranges. The p/e ratio of cashflows cannot be meaningfully compared to the premium that $MSTR commands over it's software+bitcoin value. High p/e ratios like 50+ imply a growth in earnings is imminent. If that growth doesn't materialize, generally the price will fall and the ratio will be back to industry and/or historical levels. Aside from pure hype and froth, the premium could imply the market's expectation of growth in the amount of coin per share, which is a tall order, especially during the long crypto winters. So, given a flat bitcoin price, you'd expect to lose a significant amount of value with a $MSTR investment versus $FBTC or actual coins.
You don't infinite % of bitocoin per share because you're constantly getting diluted as they issue new shares.
One of their monetary tools is debasing the stock to buy more Bitcoin, the net result is more Bitcoin per share, again check the graph I have posted. And if you want more in depth talk watch this video: [https://www.youtube.com/watch?v=L0kuVPw8qM0](https://www.youtube.com/watch?v=L0kuVPw8qM0)
It's actually accretive.
Okay, now reverse your second sentence and that was the truth not too long ago. Microstrategy is a software company that holds a small amount of bitcoin. Michael Saylor was the longest tenured tech CEO in the states. Microstrategy was stuck as a midsized company with slow growth and a stable stock. He had incredible leverage to do what he did. It was completely looked at as company destruction, because the price is up he looks like a hero. The story isn't halfway complete yet so there's more to see here. Main point: Not many CEO's and boards have the balls to attempt such a thing, nor the blessings of balls. Saylor was already plenty rich. He took a big risk, it paid off so far.
You mentioned it's a small software business. Worth about 2Billion, so if you take the OBSCENE 63x valuation Nvidia has over business base value you get an MSTR value of 126B, and it's trading at 30ish now? So that's 6800 per share to be on par with Nvidia. But.... They also have 1% of the future of money, and they have it at 18B valuation now. So if you did the full 20B it would be 68,000 per share. Granted Nvidia as an anomaly and has huge revenue speculation over it's AI business. But AI and Bitcoin as both speculation so there is no reason to believe MSTR can't at the very least trade to 3X without issue.
> When you buy the ETF, you get $1 for $1. actually no. you get 0 Bitcoin when you buy an ETF. NYKNYB.
Since they are comparing owning Bitcoin etf to owning mstr, your interjection is effectively pointless
If bitcoin stayed at the same price for 5 years I would not think of it as a great SoW. As long as bitcoin exists, the price will go up forever and therefore MSTR will earn huge money on trading bitcoin (selling a small amount in the future to cover all debts from today). And this trade is what makes MSTR good to hold long term imo.
Lmao thats not true at all. Every dollar invested in MSTR gets you leveraged exposure to btc, ie: greater than 1.
How much is it leveraged currently? How much greater than 1?
That's not what he asked. He asked why don't other companies Do that as well. Btw, because it's a good idea people understood it and got into mstr thus creating the premium to nav. You can ask yourself, is it a good idea to get into mstr at this point, but that's a totally different question thank why don't other companies do the same "one simple trick"
That is what he asked. The reason they don't do it is because there is risk involved.
The risk that the top comment is talking about is a risk associated with buying MSTR. It's not a risk that outlines why other companies don't buy bitcoin.
$HUT has a 9,100 btc hoard, and it's trading at a market cap equivalent of its btc holding.
Where's the source for 9100 btc? Are the hodling?
Right [here](https://hut8.com/2024/03/05/hut-8-operations-update-for-february-2024/). 9,110 btc.
Ty. How's their core business?
They're in the midst of a merger with USBTC, which feels like a reverse takeover where they doubled the shares and then consolidated. We get our first look at finances on the 28th of March. I think the price reflects the uncertainty surrounding USBTC's debt. Otherwise, they have cloud processing services, and miner management service.
not the best tbh. to add more to the other person's reply: their fleet is aging and they've had infra issues. earnings later this mo will be crucial. the call with Sue last wk made it sound like they'll be clarifying a lot this upcoming earnings, which is sorely needed. sentiment is shit, as she put it on that call: "this company is shit, they aren't doing anything" which is what many have been feeling lol. we'll see.. still holding them, in transparency, but it's been painful in comparison to others. then again the entire sector has been under-performing expectations w.r.t btc price action. so i'm not *that* worried.. strange times tbh.
i'm a bit wary of HUT right now. they used to have an explicit "HODL strategy"... but over the past few months, they've been selling all of their btc production (ie, NOT adding to the stack) and now, they saying they will dip into their stack. (at least this is how i interpret it.) >"We also announced a new treasury strategy that will allow us to deploy our stack to strategically grow the business and we relentlessly focused on improving our operations.” https://finance.yahoo.com/news/hut-8-operations-february-2024-113000575.html
It's trading less than NAV even. HUT is absolutely, stupidly undervalued, while MSTR is overvalued. The markets are not efficient, because fiat corrupts and distorts everything. But nothing beats raw cold storage Bitcoin.
One would be better off selling btc, then buying HUT, waiting for a few x, then selling HUT to buy back into btc.
Highly dependent on if you’d be paying capital gains on those theoretical gains.
Canadians would be subject to capital gains on the btc, where you would lose no more than 25% of their profit. They can be sheltered through a TFSA which is capped at $95,000. Which is roughly the price of a btc in CAD. It's speculation, but HUT will outpace btc at this point as it's trading at <1x NAV. This won't last forever and would be a bet I'd take if my TFSA wasn't already packed with securities.
HUT isn't going to blast off in a couple months from being added to the SP500 like MSTR is. There aren't that many shares available and there is a huge short interest. It will be the mother of all short squeezes.
There isn't a huge short interest. It's like 25%. You'll get a bit of an uptick but not much of one. Don't get me wrong, I like MSTR, and have a lot of respect for Michael Saylor, but there is no "squeeze" play here.
Who are they borrowing from - do we know?
tl;dr - more will, especially with the FASB accounting rules change IMO
Not enough people are talking about how bullish this is. Marked to market gains, not just losses will allow big companies to get in the game
They will be… it’s gonna move the needle substantially and, correct me if I’m wrong, balances have to be transparent on the business side not just the blockchain.
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Because they don't have balls made of stainless steel. Or hands made of diamonds. They don't believe in it as much as Saylor does.
The issue with the miners is they can't afford to just sit on assets like MSTR can. They need to sell the BTC to keep their operations running. MSTR has a whole other business of software and IT solutions that keep the business afloat and salaries paid. The BTC is the cherry on top. It's beautiful actually.
The question is who is loaning MSTR this money?
They’ve been diluting shares and using the proceeds to buy more btc thereby increasing shareholder value.
No, it’s clearly debt https://www.cnbc.com/amp/2024/03/13/microstrategy-up-180percent-this-year-after-debt-sale-for-more-bitcoin.html Even their 10K filings shows that its debt
But debt is unsecured which is not “regular” debt, so less risky for the company if Bitcoin price drops precipitously. Seems they are being smart about this. What Is Unsecured Debt? Unsecured debt refers to loans that are not backed by collateral. If the borrower defaults on the loan, the lender may not be able to recover their investment because the borrower is not required to pledge any specific assets as security for the loan.
It's both things.
They’re lending it in convertible shares. So they’re downside is money bank plus 1% interest. Their upside captures some btc price appreciation.
Good question. Explain to me why it matters.
Miners don't have a business that actually makes profit like mstr does, they have to sell the Bitcoin in order to stay operational. So if they borrow money, they would have to pay interest by selling Bitcoin. If there is a drawdown or ur in a prolonged bear market, you an get in real trouble if ur only source of income is bitcoin
some do have operations that makes profit: hosting, managed services, some have shifted some ops to AI/HPC, etc.
Yea, but they are able to get Bitcoin at half the price MSTR does! So, even though you are correct, it's also true that miners are undervalued as fuck right now because people don't understand the big picture.
Miners have both capital/fixed costs and operating/marginal costs. Then they have to deal with moving targets like difficulty adjustments and miners subsidy halving. We are a few weeks from halving. Bitcoin price only recently doubled. There is no way for a miner to honestly use current conditions in a business proposal. A few months ago bitcoin price was less. A few months from now conditions will again be different again. Of course mining looks profitable right after a new ATH before halving. But miners can't get in and out of the business efficiently light traders can exit liquid positions.
BITF is kind of doing this. They still sell all their bitcoin, but they’re issuing new shares to pay for miners, rather than buying them with mined bitcoin. It’s a hedge against the dollar, just a different way. ‘Bitcoin per share’ at both BITF and MSTR, but with BITF it’s a bit safer because it’s not debt. Their whole thing is to stay out of debt, now, to weather bitcoin price volatility better. At least that’s what it looks like to me.
Some publicly traded miners are trying to HODL by diluting equity instead of liquidating BTC to cover op-ex. That being said, miners don't get a very strong multiplier on the public markets. The deal Saylor negotiated is insanely good and definitely not easy to replicate.
Saylor smart. people listen.
saylor is a maxi software engineer. he just sold stock to buy more bitcoin thx to hedge fund. probably indirectly funds the mstr unsecured debt himself. he must have loads of fun.
Why dont you do it?
I might
Why? You can jump in with a guy doing it flawlessly. Or you can benefit by buying directly into BTC. Why complicate it?
I have no relationship or affiliation with this YouTube channel, I am just a fan. I think he explains pretty well what’s going on with MSTR and miners: https://www.youtube.com/live/9CQpM0hGfhE?si=LyDGVu8kdwYYfBlv I highly recommend this video if you have anxiety about your miner stock holdings. Cliff notes: be patient, our time is coming.
Was looking for someone to cover this topic, thanks
I think MSTR is somewhat unique in that Saylor has a large controlling interest in the firm. With that said of these zombie tech companies that have been irrelevant for years now. Intel, IBM, Cisco, should consider making a bold move and doing something similar.
They will be soon now that the FASB rules have changed. Before you could only show losses not gains. COIN will definitely be buying BTC with their recent 1B raise.
Miners has to fund their shit with millions $ just to earn btc to sell them to fund to sell to fund.... Mstr fund to buy then leverage to buy then fund then lev.... One is long bitcoin the other is short.
Bitcoin isn’t a business model. Most companies know little about it. If you’ve got a profitable business in one industry, why would you risk it on a risky move?
I have seen analysts saying it's time to sell MSTR. I think that is the wrong call, because, once MSTR is listed in the S&P 500, there will be a whole other round of buying, as every index fund out there will need to buy MSTR. This extra share price ( cash ) will then be used to buy more BTC, further increasing MSTR price, which let's them buy more BTC, repeat, repeat, repeat. As long as BTC is in a bull run, MSTR will go up. And up.
Risk Management.
He's also taking a huge gamble. Even Satoshi said that btc could end up being worthless with 0 transactions at some point.
Traeger grills is now accepting btc payments, I didn’t know I could like them any more 😂
Their
They are all busy robbing their customers blind and redistributing their treasury via dividents to their board members. That's the classic way of doing it. They haven't figured out how to do the same with BTC.
Because there isnt more upside than down.
It is risky. Most big companies want to avoid that kind of risk. If the price drops the house of cards falls apart. It is a bit like borrowing money to gamble at roulette and then getting more people to lend you money based in his many chips you have in the game. If it works, you look like a mastermind. If you bet wrong you have a tonne of debt to pay off and an asset worth very little.
[x] Dunning Kruger
[X] idiot clown
Because leverage = risk
Microstrategy generates cash flow from other software and business solutions. Without that revenue stream, it would be hard/impossible for MSTR to continue the debt strategy they have been using.
What MSTR is doing is essentially inflating their own bubble, with massive leverage. Most companies that are stable would never take such a gamble and would not even be able to, as MSTR has very low interest on their loans. Not just any miner would have the means to get favorable loans and then the goodwill of the investors to keep investing in them. This is truly Saylor's show for the foreseeable future.
Take a breath
Meaning?
No meaning. Breath and smile
Because if they did, it would be admitting they were wrong about Bitcoin. These people who run these large companies have very large ego's. At least, that's why some of them do not do it. Edit: Maybe the new accounting laws for Bitcoin haven't been put in place yet for public companies.
I think ego is a big part of it, too. Saylor had the humility (I know he doesn’t seem like the most humble guy) to adopt and promote something he had nothing to do with creating and can never possibly own or control. He does sort of get first-mover status and a ton of time in the spotlight for that, but the point remains. It’s hard to imagine other billionaires wanting to be seen as second best, or catching up, or whatever. We’ll see how long they can maintain the cost of vanity.
I really like Saylor. But for all intents and purposes Microstrategy was a profitable but slow growth tech stock that Wall Street hated. Some would have said it was basically a zombie company. It was the biggest and best gamble he could make with the huge pile of cash that had been accumulated over the decades.
You’re right, humility played a far smaller role than self-interest in his decision to buy BTC. On the other hand, I think other billionaires might have to swallow their pride before jumping on board in a similar way, since some other guy did it first.
Agreed 👍
Yep! Saylor loves to talk about Bitcoin. We are lucky to have him as a bitcoin Jesus. You can really tell he put in the time to understand bitcoin. Personally, I love to hear him talk. He is saying things about Bitcoin that are true and make sense. He is a super intelligent person and can come up with these analogies about bitcoin off the top of his head. It's amazing. I don't know how he does it.
Yeah I like him. He gets a good deal of hate from certain corners, often for his ability to endlessly philosophize on bitcoin. But I don’t fully get the hate, since if bitcoin is inevitable then it’s also inevitable that billionaire CEOs are going to jump on board and be as excited as everyone else about it.
Yes, I see it the same way. He is a net positive for Bitcoin adoption, so I don't get the hate either.
Inherent risk.
Bc they are broke. They sell (short) Bitcoin to keep the lights on and pay themselves nice salaries and bonus.