Adam Back opinion on MSTR strategy on BTC \ stacker news ~bitcoin

Adam Back opinion on MSTR strategy on BTC

2550 sats \ 26 comments \ @IgnaciobTato 28 Dec 2023 bitcoin

https://twitter.com/adam3us/status/1740014051390894327

note how this works is $MSTR sold $610m new shares at the market (diluting existing shareholders % ownership), but it uses the proceeds to buy BTC and in fact again BTC/share ratio increased. the net effect is about 1.4% anti-dilutive in #bitcoin/share.

previously 174,530 btc on 15.64m shares. they sold 1.077m new shares for $610m and bought $617m of btc new position 189,150 btc on 16.72m shares. resulting btc/share increased from 0.011159 btc/share to 0.011313 btc/share = 1.4% anti-dilutive

That improvement in btc/share should increase the share price, logically; setting things up so @saylor and team can do it again. (and they did this multiple times this year already)

note this is not even his money: new share-holders buying the printed shares give the company money, which it uses to buy more BTC so that the BTC/share ratio is retained (even improved slightly).

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73 sats \ 0 replies \ @SpaceHodler 28 Dec 2023

Just a thought...

They will enter the S&P 500 soon. $8b market cap already, they only need another $12b. Once they're in the S&P 500, millions of people will have exposure to the BTC price whether they want it or not, many without even knowing.

More cuckbucks flowing into MSTR -> more cuckbucks flowing into BTC. A positive feedback loop. Other companies will follow suit. MSTR will rise in weight in the S&P 500, causing even more dollars to flow into it and into BTC.

This is how Bitcoin will eat Wall St. from the inside out. And crash the dollar.

202 sats \ 0 replies \ @elvismercury 28 Dec 2023

It's the equity version of a speculative attack.

40 sats \ 7 replies \ @Entrep 28 Dec 2023

There is a good and bad side to the amount of Bitcoin Microstrategy is holding so far

30 sats \ 6 replies \ @IgnaciobTato OP 28 Dec 2023

Yes, nobody is critizising how much Bitcoin they have. The opinion is on how they are buying and where are coming the funds from.

31 sats \ 0 replies \ @0348090484 28 Dec 2023

It's like watching the Yellowstone show irl. Everyone will hate microstrategy living in the valley of bitcoin.

10 sats \ 4 replies \ @Entrep 28 Dec 2023

We better start critisizing before they own a major percentage of Bitcoin in circulation

2 sats \ 0 replies \ @grayruby 28 Dec 2023

Grayscale trust owns much more bitcoin than MSTR. The difference, one charges a fee, and the other dilutes your equity. Both are made up of tens of thousands of shareholders. You can't redeem bitcoin from either one if you want out.

60 sats \ 2 replies \ @gd 28 Dec 2023

The road to nationalisation if the US Treasury panics hard enough.

111 sats \ 1 reply \ @grayruby 28 Dec 2023

If that goes down they are going after the exchanges, etfs too. Why it is so important to have a large portion of the bitcoin supply in self custody. We cannot give back an inch, in fact we need to take more inches, regardless of how high they pump the price.

50 sats \ 0 replies \ @gd 28 Dec 2023

Absolutely 🫡 not a single inch

50 sats \ 4 replies \ @grayruby 28 Dec 2023

I think MSTR will still do well but I expect the etfs will eat into the share of folks trying to get bitcoin exposure through them.

100 sats \ 3 replies \ @orthwyrm 28 Dec 2023

I expect that some premium will be lost, but IMO they are different enough from the ETFs to remain safe because a) They act as a leveraged bet and b) There are no fees.

What might be more concerning is if another company made the same play. That would be direct competition. But MSTR have accumulated so much now that it's inconceivable to me that another company would catch up.

278 sats \ 2 replies \ @grayruby 28 Dec 2023

It's so difficult for another public company to make this play. MSTR was in a unique position that Saylor was a longstanding CEO/Founder and controlled the board. They have a high margin business that doesn't require a lot of re-investment and the business was on the decline so shareholders were looking for something to give it new life. Plus, Saylor was fascinated by bitcoin and went down the rabbit hole to find the conviction to essentially go all in.

In the landscape of public companies, I don't think you find too many that would meet this set of criteria. That being said, many public companies could copy his model of sweeping free cash into bitcoin on a smaller scale and then maybe eventually issue debt or equity to buy more as the executives, board and shareholders become more comfortable with the strategy. But I don't see another company buying 200k bitcoin any time soon. Honestly the company it makes the most sense for would be Berkshire Hathaway but it ain't happening while Buffett is alive.

70 sats \ 1 reply \ @IgnaciobTato OP 28 Dec 2023

Saudi Aramco - Nr4 on market cap, can do the same. The rest is as you say. Also Microsoft, Google, etc are much exposed to US regulations.

50 sats \ 0 replies \ @grayruby 28 Dec 2023

Could be a good fit balance sheet wise and there are obvious mining integrations for energy businesses but it is also a very cap ex intensive business.

0 sats \ 0 replies \ @byzantine 29 Dec 2023

any easy way to track the bitcoin/share ratio of mstr?

0 sats \ 2 replies \ @TheBTCManual 29 Dec 2023

I wonder how long he can keep diluting or raising debt to stack, pretty sure MSTR will hit 200k Bitcoin, but how long will businesses and sovereigns allow him to front-run them like this, especially with the ETF on the way

0 sats \ 1 reply \ @343pg 29 Dec 2023

It’s interesting isn’t it. He raised debt to buy bitcoin at the time it was insanely cheap to do so, but recently has been selling equity, seemingly as long as it doesn’t dilute btc held per share.

I suspect there’s a third way also once the share price falls too low relative to btc to do what they are currently doing. They could even buy back their own shares, start to pay down the debt if it was hard to refinance?

50 sats \ 0 replies \ @TheBTCManual 29 Dec 2023

For sure and as long as you generating cash flow you can reduce your debt obligations or like you say buy back your stock and once you get to a level where you find their is appetite for equity dilution or interest rates are favorable you can rinse and repeat, really all leveraged plays on the companies future cash flows + fiat devaluation

0 sats \ 0 replies \ @jeroldabnercollins5m 29 Dec 2023

The increase in btc/share should lead to a higher share price, allowing for future opportunities.

0 sats \ 0 replies \ @rustaceanrob 28 Dec 2023

Are there restrictions on how this bitcoin is used? I can't help but think how much Lightning Network liquidity could be added if MSTR used even a fraction of their bitcoin. Feels like LN routing fees is revenue being left on the table, especially when they already employ software engineers.

0 sats \ 0 replies \ @BitcoinIsTheFuture 28 Dec 2023

Bitcoin only. There is no second best. His company included!

0 sats \ 0 replies \ @Kaffi 28 Dec 2023

I gotta assume that at some point in the next 100 years their holdings blow up. The price of BTC drops in the short term and the wealth gets redistributed. I am a fan of how Saylor talks about bitcoin but not a fan of his strategy or of how during the last bullrun he literally told people to sell their houses to buy bitcoin right before it dropped to 17k

0 sats \ 0 replies \ @faithandcredit 28 Dec 2023

Why is noone seemingly doing what MSTR is doing but with other assets?

0 sats \ 0 replies \ @OT 28 Dec 2023

Fiat mastery right there

0 sats \ 0 replies \ @chastityheinthomas0p 29 Dec 2023 outlawed

stackers have outlawed this. turn on wild west mode in your /settings to see outlawed content.