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Has Michael Saylor's Strategy built a house of cards?
317 sats \ 15 comments \ @Coinsreporter 19h AskSN
After reading a recent article on the same from cointelegraph, I couldn't help bringing it here. The concerns about Strategy falling all of a sudden seems to me realistic than it standing firm forever.
Where there is heat, there will be leverage. The market has responded to Strategy’s gravitational pull by creating a suite of leveraged and inverse products tied to MSTR, giving retail and institutional players access to turbocharged Bitcoin exposure without holding the asset directly.
The strategic risk here lies in mismatch: retail investors may perceive these ETFs as direct Bitcoin exposure with leverage. In reality, they are trading a proxy of a proxy, subject to corporate news, dilution, and macro shifts.
While I'm not concerned for Bitcoin but people following Saylor blindly and patriotically need to think about the Strategy with a broader and distant outlook.
What do you say?
Has Saylor pushed Strategy too far? Is it now a house of Cards?
Yes, it is. 23.8%
No, it's not. 47.6%
May be. I'm not sure. 23.8%
I don't give a damn 4.8%
21 votes \ 1 day left
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30 sats \ 7 replies \ @grayruby 19h
I do think he has pushed it too far but I don't think it is a house of cards.
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20 sats \ 6 replies \ @Coinsreporter OP 19h
Well balance reply!
How do you think Strategy gonna survive a recession?
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31 sats \ 5 replies \ @grayruby 19h
There debt level is very low compared to the value of their Bitcoin. I don't think there is any risk there unless something catastrophic happened and Bitcoin dropped back sub 30k. The stock would absolutely get crushed and they wouldn't be able to issue debt or equity to buy Bitcoin during that period. An interesting thing to watch would be if the stock traded at a discount to the bitcoin holdings like it did during the last bear market would they sell some bitcoin to buy back the stock.
Currently it makes sense for them to sell share to buy Bitcoin because investors are buying MSTR at 1.5x the value of their Bitcoin holdings. Say that cut in half and the company was trading at 0.75 of their Bitcoin holdings, it would make sense for the to sell some Bitcoin and buy back their shares and wait for the discount to close to buy the Bitcoin back.
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40 sats \ 4 replies \ @Coinsreporter OP 18h
It does make a lot of sense. My suspicion is based on Strategy buying paper Bitcoins instead of real. Is that true?
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20 sats \ 3 replies \ @grayruby 18h
If you believe that Coinbase doesn't have all the Bitcoin their customers have claims on then it is true.
Some of their Bitcoin is custodied with Fidelity.
I would like to see them move it once a year just to prove it is all there. But maybe they are scare to just in case it is not. Haha
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40 sats \ 2 replies \ @Coinsreporter OP 18h
That's the problem and Strategy needs to address it before late.
If conbase falls, thatbcan be catastrophic to strategy as well.
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20 sats \ 3 replies \ @Aardvark 19h
I'm going to say maybe. It seems like Saylor is prepared to endure a bear market, although nobody was expecting it to start this soon. I don't know if we're in a bear or not, but this cycle is already deviating from past cycles.
Anyhow, I think there are other companies that are following his example that will fold before he does, but time will tell.
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0 sats \ 2 replies \ @Coinsreporter OP 19h
Im also confused but I think strategy won't survive because it's not buying real Bitcoin anymore. The paper Bitcoin thing won't sustain in case a calamity happens like 2021.
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20 sats \ 1 reply \ @Aardvark 18h
If coinbase folds, a lot of people are going to find out just how bad it is.
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0 sats \ 0 replies \ @Coinsreporter OP 18h
I despise conbase like hell. It had stolen my $17 when it was banned in India. Now they are back again but didn't recognise my old account.
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21 sats \ 0 replies \ @justin_shocknet 18h
His strategy is looking pretty safe today by comparison to megacorps that are levered to slave wages overseas... Stonks down ~10% since yesterday while MSTR flat to -1%
It's really no different than a REIT structurally, raise debt -> buy assets... only difference is real estate supply is elastic, structures depreciate, tax unpredictability, etc...
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7 sats \ 1 reply \ @nkmg1c_ventures 18h
Without the ability to redeem the stock into Bitcoin, I don't see how this is different from all the seignorage coins that pumped and then dumped.
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0 sats \ 0 replies \ @nkmg1c_ventures 14h
Well okay the company does get revenue from other operations, but I still don't see why holding the company's stock is better than just buying bitcoin
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