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71 sats \ 5 replies \ @grayruby 28 Dec 2023 \ on: Adam Back opinion on MSTR strategy on BTC bitcoin
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.
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.
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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.
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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.
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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.
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11 months later…
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