MicroStrategy's infinite money glitch

[Pekelo]

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)

 

[roca]

What if BTC decreases?
Also since his company value is directly related to BTC, wouldn't it be the same as if he issued debt/equity to just buy BTC?

 

[johnarb]

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)

This is true, but it all depends on the price of bitcoin staying high or going up

• So to summarize, Microstrategy's infinite money printer glitch uses the Bitcoin NGU technology as ink

Now that the halving has passed, Bitcoin will hit ath again soon probably within a week or two

It's probably a good idea to load up on mstr shares or mstr call options, not financial advise, though

 

[Pricechange]

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)

This is EXACTLY what Bear, Lehman, Goldman did with real estate and subprime debt...but instead of selling their shares to the public (which is declared), they sold the debt to retirement funds (which was not openly declared by PR)

 

[orbit23]

I wonder how this is going to play out for mr. Saylor

 

[Pekelo]

What if BTC decreases?
Also since his company value is directly related to BTC, wouldn't it be the same as if he issued debt/equity to just buy BTC?

Company's value decreases, since it has been a proxy BTC ETF.

 

[johnarb]

I wonder how this is going to play out for mr. Saylor

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

 

[The_Krakenite]

To be fair, Microstrategy still beats Blackrock in regard to the MER

 

[orbit23]

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

Honestly i have no clue whether it goes up or down in 2 weeks. If you do and you can make money on it, kudos to you.

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

Maybe he is just taking advantage of the Bitcoin crowd to prop up his stock which he dumped like $400M of, in which case he would be well off.

If he is converting all those proceeds into Bitcoin and truly believes it, then i don't think it will end up well for him. As he said, good education in monetary theory can be expensive.

 

[johnarb]

Honestly i have no clue whether it goes up or down in 2 weeks. If you do and you can make money on it, kudos to you.

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

Maybe he is just taking advantage of the Bitcoin crowd to prop up his stock which he dumped like $400M of, in which case he would be well off.

If he is converting all those proceeds into Bitcoin and truly believes it, then i don't think it will end up well for him. As he said, good education in monetary theory can be expensive.

Buy mstr LEAPS puts, then. Just put your money where your mouth is, mate