MSTR -- To get out or not...

johnarb said:
Every time mstr did this in the past, the shares of mstr went up the next trading day, not down

Saylor is on record that when mstr share price gets too high, the company will sell shares to buy more bitcoins

Let's see tomorrow if the market likes this news as it has in the past
More...

yeah. That’s a smart thing to do. He’s doing the arb I told you about.
 
newwurldmn said:
yeah. That’s a smart thing to do. He’s doing the arb I told you about.
More...

here’s the thing about the convertibles. If bitcoin rallies then the convertibles becomes shares and dilute the current shareholders. If bitcoin sells off it becomes debt that the shareholders
Have to repay. So saylor is selling puts on bitcoin with this transaction while monetizing all the dumb
Money that’s buying his stock. I think his stock is 2x overvalued right now.
 
MSTR has gone up 94% in the last 6 trading days and BTC is up about 33%. The current market cap is $22.6 billion but their 193K BTCs are only worth $13.1 billion. I doubt the BI business of MSTR is worth $9.5 billion. More like $1-2 billion. Maybe speculators believe BTC is going to rise another 30%.

From 2/1/2021 to 2/9/2021 it went up 100% in 6 trading as well. GBTC was up 41% in that time period. Of course that was right about the time of the GME frenzy.
 
nitrene said:
MSTR has gone up 94% in the last 6 trading days and BTC is up about 33%. The current market cap is $22.6 billion but their 193K BTCs are only worth $13.1 billion. I doubt the BI business of MSTR is worth $9.5 billion. More like $1-2 billion. Maybe speculators believe BTC is going to rise another 30%.

From 2/1/2021 to 2/9/2021 it went up 100% in 6 trading as well. GBTC was up 41% in that time period. Of course that was right about the time of the GME frenzy.
More...

Dumb money (like me long options mstr calls) are playing chess, while TradFi playing checkers, imho

The mstr bitcoin playbook has already been explained over 2 years ago. click play below




-----------------------

Here's a more recent explanation below


 
Debt buyers did not get the news FFR is 5% (probably some pension plans with restrictions to only buy debt instruments but want bitcoin exposure)

upload_2024-3-7_0-10-25.png
 
John, they have the news that FFR is 5%. Now I didn't go into the prospectus, but I'm near certain if you priced out the convertible strike, they just purchased extrinsic value that is greater than the 4.375% * their duration, that can be close to arbed off in the open market.

Dumb money is currently winning on a speculative bet, in MSTR, that the NAV premium will widen, but you eventually need to sell something you bought above true value to someone else at an even higher value to monetize spec bets. Inflows can exceed arbitrage PnL pulling value out of something for a while but we're working with finite quantities here.

MSTR is actually the most efficient entity that can monetize the spread because they don't get marked down on the risk leg. So a masterclass is in fact occurring, but not many people can see it.

You have had a long BTC thesis at a spectacular time for it and it's also gotten you to win some peripheral bets (so far) like this MSTR position. I am glad for your success. There's danger in underestimating your counterparties though, at least keep that in mind while you're winning.
 
llIHeroic said:
John, they have the news that FFR is 5%. Now I didn't go into the prospectus, but I'm near certain if you priced out the convertible strike, they just purchased extrinsic value that is greater than the 4.375% * their duration, that can be close to arbed off in the open market.

Dumb money is currently winning on a speculative bet, in MSTR, that the NAV premium will widen, but you eventually need to sell something you bought above true value to someone else at an even higher value to monetize spec bets. Inflows can exceed arbitrage PnL pulling value out of something for a while but we're working with finite quantities here.

MSTR is actually the most efficient entity that can monetize the spread because they don't get marked down on the risk leg. So a masterclass is in fact occurring, but not many people can see it.

You have had a long BTC thesis at a spectacular time for it and it's also gotten you to win some peripheral bets (so far) like this MSTR position. I am glad for your success. There's danger in underestimating your counterparties though, at least keep that in mind while you're winning.
More...

Thank you very much for your post and well wishes

I'm not playing dumb, I really am not that smart, but I do have an active imagination and do have to give credit to Bitcoin enemy Taleb for giving me the idea I can use my imagination to see alternate realities outside of survivorship bias

My nick is because I'm a simp for riskarb, totally fascinated with the ET options discussions many years ago, atticus, Maverick74, I thought when I have more time I'd be able to comprehend the intricacies, but alas, I've given up, maybe on my next life time. I failed calculus in college

40% above yesterday's close of 1051 so an out of the money call option strike price 1471, the buyers were probably shorting yesterday(?) and may sell some other calls to turn it into a calendar/diagonal spread and capture some of the premium(?)

All basics options, cannot discuss more complex strategies as I literally am incapable

But I stand on my statement that the options market makers who sold MSTR call options 7/19 1100 for $6.5 when price of mstr was low 400'sh were playing checkers

I said on 1/29/2024 the option would go to a price of $1,000, it's currently $430 with 4.5 months to go

The market makers plugged into their B/S model that an option ~700 points out of the money would have to be a six-sigma event to go in the money within 6 months, it's itm now, sure they thought they could hedge with stock, wotm, plenty of time, except the recent moves exploded the IV premium with these crazy 100-point moves and past 2 days 200+ points even

When I say they were playing checkers, they were missing another dimension

while I had confidence it was much higher probability it could happen based on the dimension they were missing which is the Bitcoin component, more specifically, the Bitcoin bull market, halving and spot etf's pushing the price of bitcoin much higher, pushing the mstr share price much higher as well

But anyway, cannot celebrate what has not happened, I'm a superstitious person and also believe I could jinx it (I just knocked on wood for countermeasures)

Being superstitious is part of my speculator psychology...

I also wish the best for you in your trades, Heroic



upload_2024-3-7_2-13-30.png
 
johnarb said:
The market makers plugged into their B/S model that an option ~700 points out of the money would have to be a six-sigma event to go in the money within 6 months, it's itm now, sure they thought they could hedge with stock, wotm, plenty of time, except the recent moves exploded the IV premium with these crazy 100-point moves and past 2 days 200+ points even
More...
Killer explanation. Really enjoyed reading it. I would love to see @destriero himself comment on it if he is still around.
 
nitrene said:
MSTR has gone up 94% in the last 6 trading days and BTC is up about 33%. The current market cap is $22.6 billion but their 193K BTCs are only worth $13.1 billion. I doubt the BI business of MSTR is worth $9.5 billion. More like $1-2 billion. Maybe speculators believe BTC is going to rise another 30%.

From 2/1/2021 to 2/9/2021 it went up 100% in 6 trading as well. GBTC was up 41% in that time period. Of course that was right about the time of the GME frenzy.
More...


Everything in this stock is now tied to bitcoin...the BI business of mstr is NOT worth $9.5 billion....


And once again I will ask why isn't any other company in the world using this trick to boost their stock price??
 
You must log in or register to reply here.
Back
Top