224 sats \ 7 replies \ @grayruby 13 Mar \ on: Is MicroStrategy overvalued or undervalued? bitcoin
It's overvalued in Bitcoin terms. It is undervalued in fiat terms.
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113 sats \ 6 replies \ @kr OP 13 Mar
what’s the correct valuation as a multiple of their bitcoin holdings? 1x? more? less?
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181 sats \ 5 replies \ @grayruby 13 Mar
Less because the software business is worth less than their debt but that is merely looking at the book value of the business.
On the flip side if you think that Bitcoin will continue to rise in value over the next 5 years and that Saylor will continue to be able issue shares/debt to acquire more and that MSTR will be added to the S and P 500 and get the benefit of ever increasing passive flows as it's marketcap grows and it becomes a larger share of the S and P 500 you could make an argument that it should trade at a reasonable premium to the Bitcoin holdings. Whether 2x is reasonable premium or not is for smarter people than me to figure out. I would argue it's a bit rich.
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50 sats \ 2 replies \ @kr OP 13 Mar
reasonable take, i forgot to account for their debt load
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10 sats \ 0 replies \ @grayruby 13 Mar
Easy oversight this day and age. No one cares about debt anymore. Haha
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0 sats \ 0 replies \ @SpaceHodler 14 Mar
But that debt should become a smaller fraction of the NAV as the fiat price of bitcoin rises?
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10 sats \ 1 reply \ @Undisciplined 13 Mar
What would be the reason to buy them at 2x the bitcoin price, when you could just buy an ETF at closer to parity?
If their bitcoin holdings more than double, while the number of shares stay the same, then I guess you're getting good value.
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25 sats \ 0 replies \ @grayruby 14 Mar
Maybe short covering. Maybe speculation it will get added to S&P 500.
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