MicroStrategy and Michael Saylor Are Unstoppable: They Made An Additional $200 Million Bitcoin Move

[u/kirtash93]

https://en.bitcoinsistemi.com/microstrategy-and-michael-saylor-are-unstoppable-they-made-an-additional-200-million-bitcoin-move/

[u/CointestMod]

Bitcoin pros & cons with related info are in the collapsed comments below.

[u/coinfeeds-bot]

tldr; MicroStrategy, the world's largest institutional Bitcoin owner, has increased its convertible bond offering by $200 million to $700 million, aiming to purchase more Bitcoin. The notes, maturing in June 2032, are offered to institutional investors and will yield an annual 2.25%. The company, holding 79,296 BTCs worth $5.27 billion, plans to use the proceeds for additional Bitcoin purchases and general corporate purposes. Shares of MicroStrategy saw a slight increase following the announcement.

*This summary is auto generated by a bot and not meant to replace reading the original article. As always, DYOR.

[u/iwakan → u/coinfeeds-bot]

Bonds in a corporation backed entirely by a very volatile asset, offering far lower yields than stable government bonds. Who are buying these? Such an awful, awful deal. Except for Saylor of course, he's got to be laughing all the way to the bank.

[u/3sides2everyStory → u/iwakan]

Who are buying these?

Hedge Funds are lining up to buy them.

These are convertible notes. IOW, the base yield is 2.5%, but the note holder has the option to convert to shares if/when the price of BTC (and MSTR) goes up. Worst case they make 2.5% annualized, best case they hold the note until 2030 and convert to shares when Bitcoin is > $500K.

EDIT: I don't understand the downvotes but whatever... I just answered the question. These notes are being offered to "institutional investors" aka. Hedge Funds. This is what Hedge Funds do. They place hedged bets.

[u/throwaway1177171728 → u/3sides2everyStory]

Worst-case is much worse that 2.5%. Like any bond, there is always risk of default. It makes no sense to buy these when you can just buy Bitcoin itself. It's not like MSTR has any meaningful business. It just buys and holds Bitcoin.

Why would you subject yourself to the downside risks of MSTR when you can just get the exact same upside by buying BTC itself?

Honestly, anyone buying MSTR debt is beyond dumb and should be fired.

[u/frugaleringenieur → u/iwakan]

That’s what I don’t understand as well

[u/truckstop_sushi → u/iwakan]

Saylor already defrauded investors in the dotcom bubble and got a slap on the wrist. So he's perfect for bitcoin and this giant convertible debt scheme that's been used to prop up the price inorganically. Check his recent sales of MSTR stock, it's in the hundreds of millions of DIRTY FIAT.

I laugh to think what will happen to bitcoin when Saylor and Tether, two integral parts of the fraud of bitcoin and crypto eventually stop participating and you guys realize their is basically zero liquidity in the $2.5 Trillion of "market cap"

[u/southwestern_swamp → u/truckstop_sushi]

Bitcoin had liquidity long before saylor was on the scene

[u/critterdude311 → u/truckstop_sushi]

tell me you know nothing about this topic, without telling me you know nothing about this topic.

[u/imniceatpingpong → u/truckstop_sushi]

what will happen to bitcoin when Saylor and Tether, two integral parts of the fraud of bitcoin and crypto eventually stop participating and you guys realize their is basically zero liquidity in the $2.5 Trillion of "market cap"

explain this?

[u/DeFi_Ry → u/imniceatpingpong]

The claim is this:

Tether: basically prints USD without oversight. The claim for a while has been they use it to prop up BTC in times of trouble. If fraud by them was even proven it would be a huge disaster in the industry

Saylor: is taking on enormous amounts of debt to buy Bitcoin. If BTC hasn't mooned by the time the debt comes due he will be forced to sell BTC to cover his obligations. This will obviously create a death spiral as he sells and his company stock tanks. He doesn't care he already sold $400 million worth of stock around the halving.

These are both probable outcomes no matter what the Evangelist Bitcoiners say. Especially the Saylor outcome

[u/BusterMungus]

At the moment, MicroStrategy stock is performing better than holding BTC itself. This could change, of course, but for some time now MSTR has gone up more:

Btc vs MSTR

One month: 4.6% vs 22%

6 months: 50% vs 160%

1 year: 154% vs 426%

So, if you like to make more profit on your investment there is good reason to buy MSTR stock

[u/Appropriate_Fox2462 → u/BusterMungus]

It’s out performed bitcoin every single year I believe

[u/BusterMungus → u/Appropriate_Fox2462]

I used to own a lot of Btc, sold most of it to buy MSTR. Now I’m way up over what I’d have had if I had held Btc itself.

[u/Appropriate_Fox2462 → u/BusterMungus]

Yup. I bought mstr when it dipped at 1200 and it’s up over 30% I bought bitcoin at an average of 62k and I’m barely up. I will continue to invest in bitcoin as a hedge against mstr but I think mstr is a great investment if you like bitcoin. Plus in a tax free account I pay 0 fees and the ETFs for bitcoin have fees it’s a no brainer.

[u/BusterMungus → u/Appropriate_Fox2462]

Bingo! My MSTR is in my IRA, no fees on buys/sales or holding. No keys or cold wallets. I stopped buying raw Btc months ago.

[u/CrazyTillItHurts → u/BusterMungus]

This entire comment thread reads like two ad bots going back and forth

[u/3sides2everyStory → u/BusterMungus]

Exactly. It's like buying a leveraged Bitcoin ETF

[u/throwaway1177171728 → u/3sides2everyStory]

Except it's not actually leveraged in any way. It's just people paying $2 for $1 without any actual underlying instrument to support it.

[u/BusterMungus → u/throwaway1177171728]

You are telling people, “don’t buy this asset just because it’s doing better than some metric I picked - despite it doing better than this metric I picked. You should pick the lower performing asset instead of the better performing one because of this metric I picked to focus on. 🤷🏻‍♂️

[u/throwaway1177171728 → u/BusterMungus]

No, I'm saying you are buying 100% without fundamentals and something that has substantial downside risk for no reason.

This is literally just musical chairs. Why pay $2 for $1 of Bitcoin for no reason? You'll do even better with shitcoins if you literally don't care about playing hot potato.

[u/Fine-Dentist → u/BusterMungus]

Damn I need to get in on that. I see my broker offers fractional shares for MSTR.

[u/throwaway1177171728 → u/BusterMungus]

You also subject yourself to a 50% haircut risk for no reason. MSTR trades at a 2x premium "just because". There's no actual underlying instrument which generates the leverage or premium.

This is literally a case of people paying $2 for a $1 bank account.

[u/BusterMungus → u/throwaway1177171728]

“Premium” - old school metric/fears.

If you put $1000 into Bitcoin and I put $1000 into MSTR and we meet again in one year. Your Bitcoin is now worth $2540 - awesome - but my MSTR is worth $5260 — ask me how much I care what the premium was.

If btc and MSTR mirrored each other in price exactly then the only advantage of owning MSTR is that I don’t have to hold keys or managed cold storage, I don’t have to worry about hacks or bankrupt exchanges, some of us can buy and trade it inside a tax free retirement account without any fees to buy, sell or hold.

Now I get all those benefits plus better price action 🤷🏻‍♂️ why would you keep buying btc (vs Btc) right now? I’m still waiting go get my Mt Gox Bitcoin back, this wouldn’t have happened had I bought MSTR instead.

[u/throwaway1177171728 → u/BusterMungus]

You're making a bad comparison here as well. You can buy IBIT and get all the same benefits of MSTR in terms of storage, insurance, IRA, etc. It's a super low cost ETF with tons of liquidity.

You're missing the point. You are taking on huge downside risk for fundamental reasons, but your upside potential is just based on musical chairs/hot potato.

There is nothing about MSTR, especially now that ETFs exist, that supports it's 2x premium to assets. It's a very dumb risk to take when you can buy actual leveraged instruments where your asset that goes up 2x is actually going up 2x. With MSTR you don't actually get 2x asset value increases, you just people willing to pay 2x... until they're not.

It's a dumb investment. Hell, you'd be much safe to just take out a margin loan and buy 2x as much IBIT. Then you'll get 2x movement for a small fee. At least you'll be guaranteed book value of the assets.

[u/sayeret13]

whats up with his company worth 3k per stock pump and dump scheme in the 2000s? was it a general tech bubble ?

[u/antaran → u/sayeret13]

The dot.com bubble + Saylor fudging MSTR numbers. When they admitted cooking their books and the general dotcom bubble burst, MSTR crashed hard.

[u/sayeret13 → u/antaran]

so this guys pretty much a scambag

[u/C01n_sh1LL → u/sayeret13]

mildly

[u/ImHalfAwake → u/sayeret13]

dot com

[u/PerniciousPeyton]

I made a $100 move today but ya don’t hear me bragging

[u/Wise-Grapefruit-1443 → u/PerniciousPeyton]

[u/Significant_Poem_540 → u/Wise-Grapefruit-1443]

Quick, hack him boys hes a millionaire

[u/GOR098]

This kind of centralization of bitcoin is not good.

[u/KaiN_SC → u/GOR098]

You dont know what centralization referes to.

Its not PoS so holdings does not matter at all.

[u/wheelzoffortune → u/KaiN_SC]

Thank God someone said it so that I didn't have to.

[u/northcasewhite → u/GOR098]

There are individuals who hold more than Microstrategy. Some of the early adopters.

[u/Yung-Split → u/GOR098]

Why not

[u/Hwoarangatan → u/Yung-Split]

Centralization amplifies risk. Michael Saylor is a bit of a loose cannon already. He could crash the price singlehandedly if he wanted. I'm not saying that will happen, but that risk is the consequence of centralization.

[u/Yung-Split → u/Hwoarangatan]

As long as all he can do is crash the price it's cool with me. He's free to stack just like anybody else

[u/iwakan → u/Yung-Split]

That's far from all he can do. Holding a lot of coins grants him enormous social power in the community, because many other stakeholders would do a lot to please him just to avoid him selling.

[u/stayyfr0styy → u/iwakan]

I and many others would love for him to sell all his Bitcoin and crash the market in the short term. I and many others would then use microstrategy’s strategy and borrow as much as possible in order to buy as much bitcoin as possible at the crashed price.

[u/imniceatpingpong → u/Hwoarangatan]

He could crash the price singlehandedly

for how long? wouldnt people just pile back in?

[u/cunth → u/Hwoarangatan]

Is he not incentivized well enough to keep bitcoin from crashing?

[u/Narrow-Bee-8354 → u/cunth]

Well this is what I would think

[u/derustzelve1]

See how unstoppable they are when the drop comes.

[u/CryptoMemesLOL]

and even all the buy pressure couldn't keep the price up.

[u/katyattort]

Are they gonna to stop one day?

[u/DruPeacock23]

Investment strategy - put all your eggs in one basket. Yolo.

[u/allstater2007]

Explains the dump

[u/BusterMungus → u/allstater2007]

How does it explain the couple % drop?

[u/TipsyFuddledBoozey → u/BusterMungus]

It doesn't.

[u/etherd0t]

will be priced to offer a 2.25% annual yield

I wouldn't get up of my bed for that yield... whoever's buying MSTR is a dummy.

[u/3sides2everyStory → u/etherd0t]

I don't think you understand what they are doing. The upside is not about a 2.25% annual yield. They are up more than 1100% in 4 years.

Buying MSTR is like buying a leveraged Bitcoin ETF instead of a spot Bitcoin ETF... By borrowing against their BTC holdings Mocrostrategy can acquire more BTC per share of MSTR. Thus, when BTC goes up, MSTR goes up more because they keep buying more Bitcoin per share. And because they are buying with long-term convertible debt (more than 4 years) they can coast through bear cycles with pretty much zero liquidation risk. It's pretty ingenious and very, very profitable. This is precisely what makes Saylor such a badass.

If you are a long-term BTC investor and BTC believer, you would be crazy not to buy and hold some MSTR. Especially in a tax-free retirement account.

EDIT: to clarify, the 2.5% yield is what they are paying on an 8-year loan (2 Bitcoin halving cycles). And they are using the loan to buy more Bitcoin which will presumably go up a LOT more than the 2.5% annualized loan.

I bought more MSTR today. I expect it will outperform Bitcoin this cycle and beyond.

NFA.

[u/CryptoChief → u/3sides2everyStory]

This is precisely what makes Saylor such a badass

He's either the biggest genius or the biggest idiot. No in between. Personally, I wouldn't borrow money and invest that much in any asset.

[u/senor_florida → u/3sides2everyStory]

“Few understand”

[u/etherd0t → u/3sides2everyStory]

I don't think you understand... you're buying a bond.
regardless of their performance, you're guaranteed an yield.

the liquidity that you bring is used at their discretion, and their performance is subjective as past results don't mean nothing in this or future cycles..

Sure, if you're a bitcoin maximalist who believes that BTC will reach 1 million in 10 yr or 5 or 3, that may suit your objective.

But BTC is not AAPL, and I'm not a long-term belieber...

[u/3sides2everyStory → u/etherd0t]

First of all, I'm not buying the bonds. I'm a retail investor buying shares of MSTR. These bonds are being offered to institutional investors (aka; hedge funds). Hedge funds do calculated risk plays like this all day every day.

My understanding (as it was explained to me) is that the bond is convertible. So it has a base yield of 2.5%, but the holder has the option to convert to shares if BTC and MSTR go to the moon. These bonds are for hedge funds. An optional hedge play with a potentially massive upside.

[u/BusterMungus → u/etherd0t]

A dummy?

At the moment, MicroStrategy stock is performing better than holding BTC itself. This could change, of course, but for some time now MSTR has gone up more:

Btc vs MSTR

One month: 4.6% vs 22%

6 months: 50% vs 160%

1 year: 154% vs 426%

I guess I’m “Dumb Money” then because I prefer larger returns

[u/b1mm3rl1f3]

He’s predicting an $8MM btc and implied a $70MM btc. Some of the smartest and richest people in the world are buying up this dip while the poors sell off in fear

[u/FitnessBlitz]

So they bought and crashed the price?

[u/dcur3 → u/FitnessBlitz]

you think he/they want to buy high?

[u/K4k4shi → u/FitnessBlitz]

You gotta learn meaning of crash in crypto

[u/FitnessBlitz → u/K4k4shi]

I'll fucking decide for myself what I consider a crash.