MicroStrategy's infinite money glitch

[engineering]

This a great example of why simple market cap weighted index investing is stupid.

You need to have some other criteria like PE ratio to filter money losers, businesses models where it would be super easy to commit fraud, etc .

 

[The_Krakenite]

In my mind on a long enough timeframe (2 years) the Microstrategy will be in the gutters and Saylor will be rekt.

The last time I heard something like that, was about 2 years ago. That perma-bear doesn't post here anymore.

 

[johnarb]

This a great example of why simple market cap weighted index investing is stupid.

You need to have some other criteria like PE ratio to filter money losers, businesses models where it would be super easy to commit fraud, etc .

You're barking at the wrong tree. Mircrostrategy is a profitable company and produces cash flow from business operations

They sold (oversubscribed) convertible notes within the past 4 months, do you think the buyers were too stupid and did not do proper due diligence?

Such arrogance from the naysayers here assuming investors into mstr shares and debts are all blind and dumb

Maybe, just maybe, they've done more research than all of you since they actually have money at risk

 

[S2007S]

Are you shorting mstr or buying mstr puts, then?

mstr has already gone down 800 points, but if bitcoin goes back above $75k, mstr could be trading above $2,000... in 2 weeks

and that will be a significant opportunity to short more

Stock.is not even worth 50 bucks a share!!

 

[S2007S]

You're barking at the wrong tree. Mircrostrategy is a profitable company and produces cash flow from business operations

They sold (oversubscribed) convertible notes within the past 4 months, do you think the buyers were too stupid and did not do proper due diligence?

Such arrogance from the naysayers here assuming investors into mstr shares and debts are all blind and dumb

Maybe, just maybe, they've done more research than all of you since they actually have money at risk


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If this strategy supposingly works for mstr how come thousands of publicly traded companies aren't doing the same thing as them???

 

[johnarb]

and that will be a significant opportunity to short more

Stock.is not even worth 50 bucks a share!!

Are you still short mstr from $700? Did you keep adding more to your short as you said you would?

If this strategy supposingly works for mstr how come thousands of publicly traded companies aren't doing the same thing as them???

It needs shareholder approval

When Saylor proposed to invest all of mstr treasury to bitcoin to the mstr board and it was approved, there was an offer to all shareholders to buy out for a 20% premium, something like that, you can do the research it was in 2020

Ask yourself how many public companies can get that done?

There are public companies that own bitcoin in their treasury now, Block, Tesla, Mercado Libre... but none are on the level of the Microstrategy infinite money glitch, i.e. issue debts and shares to buy more bitcoins

 

[The_Krakenite]

If this strategy supposingly works for mstr how come thousands of publicly traded companies aren't doing the same thing as them???

When angry people start to use "???", it's a sign they don't know how to carry out a google search.

https://bitcointreasuries.com/#public

Legacy rules regarding FASB accounting practices have made it extremely difficult for public companies to accurately reflect bitcoin on their balance sheets. This almost made it suicide for companies to try to purchase these assets. Luckily, there has been some progress on this just a short time ago. So expect Larry Fink to be correct on this also when he says there will be an explosion of bitcoin on the books.

 

[S2007S]

Are you still short mstr from $700? Did you keep adding more to your short as you said you would?



It needs shareholder approval

When Saylor proposed to invest all of mstr treasury to bitcoin to the mstr board and it was approved, there was an offer to all shareholders to buy out for a 20% premium, something like that, you can do the research it was in 2020

Ask yourself how many public companies can get that done?

There are public companies that own bitcoin in their treasury now, Block, Tesla, Mercado Libre... but none are on the level of the Microstrategy infinite money glitch, i.e. issue debts and shares to buy more bitcoins

I covered that short a while back and went short again just under 1000, yes I held it all the way up to 1800. Was going to average in but didn't since I'm also short MARA and CONL. So once Mstr drop below 800, which it will I'll cover. I'm not worried.

 

[johnarb]

I covered that short a while back and went short again just under 1000, yes I held it all the way up to 1800. Was going to average in but didn't since I'm also short MARA and CONL. So once Mstr drop below 800, which it will I'll cover. I'm not worried.

Very respectable of you to admit that

It would have been easier to short all of these names during the bear market 2022, or were you shorting then, also?

 

[maxinger]

We have to give it to Saylor, he finally discovered the ultimate money glitch. this is how it works:

1) MSTR issues debt to buy BTC

2) BTC increases against debt, MSTR marketcap increases

3) MSTR marketcap increases, weight in indices increases

4) MSTR issues equity to buy BTC

5) BTC increases, MSTR marketcap increases, weight in indices increases

6) MSTR issues more equity to buy BTC, total BTC increases

7) Repeat infinitely for infinite money glitch

At the same time, Saylor is offloading his personal shares (currently 370 M), making a killing, and supposedly buying even more BTC personally.

If you like a more colorful analogy:

"He owns a chocolate shop.

But nobody wants to buy his chocolate.

But these tulip bulbs come around, everybody wants tulip bulbs so his shop buys as much as it can.

When the shop runs out of cash, it goes to the bank and borrows money on the "price" of his shop. Worthless shop plus expensive tulip bulbs.

He sells shares in his worthless shop that has all these tulips. Uses that money to buy more tulip bulbs.

But before people wake up and ask does anybody enjoy the flowers from these tulip bulbs for hundreds of thousands of dollars, he sells his stake in the company.

Thankfully it's publicly declared when you sell shares.

https://www.barchart.com/stocks/quotes/mstr/insider-trades

Ultimately the problem is taking financial advice from a guy selling $7 million of shares every day.

If he believes so strongly why would he sell his shares in a company with 213,000 units of the strongest/hardest/limited asset on earth??

That's over 1% of all bitcoin, but represents a greater overall ownership once you take into account lost or locked out bitcoin."

(explanations quoted from Reddit)

You sounded very angry/furious/frustrated.
What happened?



From a technical perspective....
there were 3 mega peaks;

Mar 2020
Feb 2021
Mar 2024


So there were a total of 5 mega-trading opportunities :

up (to Mar 2020 peak @3300)

then down

then up (to Feb 2021 peak @1300)

then down

then up (to Mar 2024 peak @2000)

then down?
then up?
then down?
then up?

Congrats to those elitetraders who managed to catch those mega movements.