MicroStrategy's Big Bet On Bitcoin Went Stratospheric (theguardian.com) 33
MicroStrategy has transformed into a "bitcoin treasury company," investing billions in bitcoin through debt and equity issuance, driving its stock price up nearly 400% in 2024 despite declining software revenues and heightened financial risks. The Guardian reports: In the summer of 2020, as the Covid-19 pandemic upended economies around the world, an obscure U.S. software firm decided to diversify. MicroStrategy, whose head office is situated next to a shopping mall and metro station in Tysons Corner, Virginia, had decided the steady business of "software as a service" was not racy enough. Instead, it would branch out by investing up to $250 million in alternative assets -- "stocks, bonds, commodities such as gold, digital assets such as bitcoin or other asset types." Less than five years later, that bitcoin side hustle has gone stratospheric. MicroStrategy's share price has swollen twentyfold, lifting its market capitalization to almost $75 billion and catapulting the stock into the Nasdaq 100 index of top technology shares.
Nope... (Score:2)
Doesn't matter how logical that sounds to you. It's not what that word means. Guessing you can feel that way because you're often directionally/approximately correct.
I get it why you'd consider that idea, but time to correct your mind, with effort and time, through repetition. How would you solidify any other definition for a word that you're close on, but not quite right? Or a foreign language?
Also it pays to realize a lot of those 200x or 10,000% things are designed to lie. They don't tell you all th
Re: (Score:2)
I had this same idea a few decades ago. Basically, a human query language.
Re: (Score:2)
No.
Why? What is a 'bitcoing treasury'? (Score:2)
A reserve of coins? Have that thanks. What service(s) do they actually offer other than having bitcoin written down?
Re: (Score:2)
Gambling.
Re: Why? What is a 'bitcoing treasury'? (Score:2)
Do they want it to go full circle? Will they issue IOUs for Bitcoins just like traditional banks do for dollars?
What goes up (Score:1)
Re:What goes up (Score:4, Insightful)
look at the price of the dollar over the last 110 years. It went up exactly once and almost destroyed the country.
Thats what microstrategy is betting against: the US dollar.
Considering the limits of fed policy, its pretty much a guaranteed win.
Unless the government bans bitcoin or somehow prevents microstrategy from holding it, they cant really lose. The dollar cannot change its stripes.
Re: (Score:2)
Re: (Score:2)
Re: What goes up (Score:2)
You'd just push Bitcoin owners to countries that aren't unfavorable.
Re: (Score:2)
Indeed. And by now there is no realistic possibility of it not being catastrophic. People continue to be abysmally stupid.
Re: (Score:2)
Re: (Score:2)
And nothing of value was gained (Score:2)
nt
MSTR is not software co. It is a holding company (Score:4, Insightful)
With a net asset value (NAV) premium of 1.78. So they are a holders of bitcoin and seller of their own stocks with a premium of 1.78 MSTR to every bitcoin. Yes, they keep on selling stocks. Why would anyone hold MSTR when they can now just buy bitcoin? If speculators (these are not investors) are foolish enough to buy into MSTR, let them. One could argue that at some point, the NAV may be okay to hold, but not at 1.78.
Re: MSTR is not software co. It is a holding compa (Score:2)
MicroStrategy doesn't just buy and hold. They actively trade using leverage. The premium is the expected alpha over buying and holding Bitcoin.
Makes no sense. (Score:3)
Re: (Score:2)
Indeed. It is utterly pathetic. There people are supposed to be adults with some minimal level of insight, not greedy children with none.
How Markets Really Work? (Score:2)
What this may tell you is that the intrinsic value of something has little to do with how markets price it.
What ought to concern us is that it may apply to a lot of other assets. Are home prices going up because the underlying value has increased as a result of a shortage. Stocks because companies are more productive. Or is it just market frenzy. And how low can they go in the other direction?
Imagine the impact of home prices dropping as fast as they have gone up. People frantically trying to unload their
Re: (Score:2)
Re: How Markets Really Work? (Score:1)
Re: (Score:2)
With a house, you have ongoing expenses â" property tax, maintenance, insurance, to protect your investment. With Bitcoin there are none.
True but with a house I also have ongoing utility (either a place to live or a source of rental income). Just holding Bitcoin gets me nothing.
Re: How Markets Really Work? (Score:2)
You can get "rental income" from some exchanges that will pay you some annual premium to hold your BTC. Risky: probably. Being a rental owner doesn't come without risks either.
See? They no longer need customers (Score:2)
"Swarm of cyber hornets" Saylor will get rid of the next liability, all those pesky employees. Only then can the company be purely profit.
Reminds me of Long Blockhain Corporation (Score:2)
Reminds me of Long Blockchain Corp. (formerly Long Island Iced Tea Corp.) which didn't work out so well.
MicroStrategy branched out to a completely unrelated sector and, somehow, became successful at it--unlike Long Blockchain Iced Tea.
Also reminds me of Zapata fish oil company that went all-in on the dot-com bubble in the late 1990s, early 2000s, and failed miserably.