Hey Recyclersteve, MSTR of no interest to you?

[shinnosuke]

Steve, I hope you will share all the gory details with us until you close your short.

Why don't you just buy some Bitcoin for all the excitement it provides?

[tdtwedt]

[shinnosuke]

Very exciting

MSTR midday.png (41.72 KiB) Viewed 91 times

[tdtwedt]

Michael Saylor has lost voting control of MicroStrategy

However, because MicroStrategy has issued so many shares and debt to buy bitcoin, including today’s upsized round, Saylor’s voting control is now less than 50%.

https://protos.com/michael-saylor-has-l ... ostrategy/

[shinnosuke]

TYSONS CORNER, Va., November 20, 2024 — MicroStrategy® Incorporated (Nasdaq: MSTR) (“MicroStrategy”) today announced the pricing of its offering of $2.6 billion aggregate principal amount of its 0% convertible senior notes due 2029 (the “notes”). https://www.microstrategy.com/press/mic ... 11-20-2024

"Eric Weiss @Eric_BIGfund
Hey @PeterSchiff is the market willing to give you $2.6+ billion at 0% for 5yrs to buy gold?"

Even if Saylor wasn't making so much money, the entertainment value is high, especially with Schiff involved. Personally, I believe Schiff owns Bitcoin (he has already admitted that his son does) and he is trash-talking it to try to improve his entry points. Crazy theory. No proof.

[shinnosuke]

Hey, Steve. If you’re up to watching a 4.5 minute video about MSTR, click on the link below. I don’t want you to lose money on your short position.

https://x.com/adelgary/status/1859330327233036727?s=46

[shinnosuke]

OK, just for those who want to understand how Microstrategy is doing so well, I'm going to copy/paste a thread from X. Keep your hands and feet in the vehicle at all times. This is going to be a wild ride.

(begin quote)
Dan @Kingbingo_

Something crazy is happening in money - you might want to give this thread 5 minutes.

Moneys value is being printed away - we all see the absurd inflation.

But one company may have found a way to create an infinite money glitch. Actually free money - forever.
#MSTR

Why would you care? Well let's assume you are a comfortable middle class person who had a spare $100,000 and you invested in MSTR The day before Trump won.

This is what your daily returns would have looked like:
Nov 6: +$13.1k
Nov 7: +$5.7k
Nov 8: -$171
Nov 11: +$30.5k
Nov 12: +$7.2k
Nov 13: -$12k
Nov 14: -$312
Nov 15: +$5.7k
Nov 18: +$19.4k
Nov 19: +$20k
Today: +$26k

Total + $115,101 - In two weeks!

(This isn't directly a Trump Trade stock - but his win unleashed a more positive sentiment)

During COVID, when money printing went wild, a small NASDAQ company: MicroStrategy (MSTR) realized its $400M cash was losing value fast.

Rather than take the hit or return the cash to shareholders, they converted it into Bitcoin.

That was new, but the story gets crazier.

MSTR traded at a premium over its Bitcoin holdings plus its original business value.

Why? Many people wanted exposure to Bitcoin but found it hard to buy directly, especially in pensions or restrictive countries.

Usually, a premium is bad, but here's where the magic starts.

MSTR realized they could issue new shares-normally dilutive = bad - but then use the proceeds to buy more Bitcoin.

This temporarily lowers the premium, but as Bitcoin reserves increase, the premium returns. Shareholders gain a stronger reserve and higher share price—a win-win.

Simple example: MSTR holds 100 BTC but is valued at 300 BTC equivalent—a 3x premium.

It issues new shares worth 100 BTC and buys 100 more BTC. Now it holds 200 BTC, valued at 400 BTC—a 2x premium.

But as the premium returns to 3x, the value becomes 600 BTC. Shareholders get more BTC and higher share price—for free.

Normally, dilution is bad—like watering down wine. But if someone keeps turning that water into even better wine, you'd welcome it.

That's what's happening: melting fiat money is converted into hard money (Bitcoin), and you end up with more of both. But it gets even crazier!
MSTR is adding Btc to its holdings, and Btc is growing at 30-50%. Public companies trade at multiples NVIDIA trades at 70x earnings. If MSTR adds 10% more BTC and BTC grows 30%, that's 30x10%=300%. That's why a 3x premium is justified.
MSTR realized it could use future higher share prices to generate greater returns. With Convertible Bonds. It's debt that pays interest and redeems like any bond, but at higher share prices, it converts into MSTR equity. So, it acts like a bond when low, a share when high.
Traders love trading volatility (VOL). They buy when prices drop and sell when they rise - the opposite of many amateur investors. MSTR's convertible bond ticks all the boxes: you can buy at low VOL, sell high VOL, and it has a strong balance sheet-great creditworthiness.
The massive convertible bond market went wild for these bonds. Even better, these bonds kept converting, generating returns of 90%+ for investors. That's insane for a bond—everyone wants them. So how does this help shareholders?
Because MSTR can use this debt to buy Btc. It's now leveraging not today's premium, but the premium from a year or more in the future. The flywheel effect accelerates- harvesting future returns today. Instead of investing and waiting, MSTR brings future gains into the present.
The limiting factor: before these bonds convert, they're still bonds, requiring a coupon. So scale of this magic is limited by MSTR's cash flow from its software consulting business. For example, $50M cash flow at 4% interest lets you borrow $1.25B to feed the flywheel.
But then this happened: demand for these high-return bonds is so great that investors have pushed the interest rate to ZERO. Giving MSTR money for FREE - for bonds that convert with high returns. Now, there's no limit to how fast this can progress.
THIS IS NOT FINANCIAL ADVICE. This situation is hot, maybe it blows up somehow. But what if this keeps flowing? Read this and decide for yourself:

Just Some Guy @catchthe_wave3

I was speaking with a friend of mine who is a PM at a large investment firm. The topic of MSTR came up, and he opined that Saylor may eventually run out of homes for the convertible bonds placements. So I asked him three questions: 1. "How many billions in pensions does your firm manage?" He responded with a 12-digit number which I won't share. 2. "How many of those pensions are restricted from buying anything other than fixed income securities?" He said around 30-35%. 3. Finally I asked, "What percentage of those 35% are underfunded?" Answer: 90%. I raised my eyebrows to implore him to take the next step, gave it a second to register with him, and then his eyes got large, followed by a "HOLY SHlT!" It suddenly struck him that all these underfunded pensions would kill to have a fixed income security that could provide BTC-esque returns. Stats show that as of June 2023, public pension plans in the United States were 77% funded, meaning that there was a shortfall of about $1.49 trillion. Just like a US strategic BTC reserve could eventually wipe away our debt, so too could MSTR convertibles cure the shortfall of pensions. Think those that can only invest in fixed income securities want access to this lifeline?! I think there is an almost unlimited demand for these MSTR convertible bonds. This is even more evident by the fact that they are offering them at 0%. (end quote)

I hope this Great LEE improved your outlook on Saylor.