MicroStrategy Buys $250M in Bitcoin, Calling the Crypto ‘Superior to Cash’

[The Sceptical Chymist]

I wonder if Saylor learned anything from Do Kwon's idiot plan to publicly telegraph giant buys of bitcoins. 

Well, he certainly doesn't seem to have any kind of filter from his brain to his mouth when it comes to his love of bitcoin--and I'm not so sure it's a great idea for him to be extolling the virtues of bitcoin on Twitter, Youtube, and wherever else considering how large a position MSTR has in it.  The SEC and/or MSTR's shareholders might eventually put him under the microscope for doing that.  I have no idea if he's doing anything illegal by doing that, but I'll bet that his shareholders are pretty pissed right now.

As I've said before, it's great that Saylor is such a big advocate of bitcoin....but he runs a publicly traded company and seems to be using every spare dollar (and more) the company earns to buy it.  I'm sure nobody was complaining when bitcoin was rising, but now?  Yeah, I'm just waiting until there's a class action lawsuit brought against MSTR for something related to bitcoin.

When I woke up today and saw that bitcoin was under $19k, the first thing I thought of was MSTR and how much of a hit they're going to take.  Yikes.

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[Daltonik]

Micheal Saylor thinks Bitcoin is on sale, and he is holding to their strategy :
"We don't panic, we have a strategy"



He doesn't regret anything done with Microstrategy's money and actually looking to buy more.

Of course, from the investor's point of view, Saylor is right and he now sees everything that is happening as a way to achieve the capitalization of the $10 trillion crypto market, but this is the way through the elimination of unregulated exchanges and, according to him, through the purification of the cryptocurrency market by state regulation to attract state institutions to crypto, this is the way from decentralization to accepting pressure from regulators.

[Poker Player]

I wonder if Saylor learned anything from Do Kwon's idiot plan to publicly telegraph giant buys of bitcoins.  

Well, he certainly doesn't seem to have any kind of filter from his brain to his mouth when it comes to his love of bitcoin--and I'm not so sure it's a great idea for him to be extolling the virtues of bitcoin on Twitter, Youtube, and wherever else considering how large a position MSTR has in it.  The SEC and/or MSTR's shareholders might eventually put him under the microscope for doing that.  I have no idea if he's doing anything illegal by doing that, but I'll bet that his shareholders are pretty pissed right now.

And the popularization of the idea that you have to borrow from anything to buy Bitcoin? He even advocates that you mortgage your house to buy Bitcoin.

At the time it caught my attention and when I found him more convincing, it was something I didn't agree with, but seen today it seems like nonsense.

It's one thing Frank Giustra threw in his face in the Gold vs Bitcoin debate: throwing that message out there is dangerous for the masses. Some innocent person who believed his message and mortgaged his house to buy Bitcoin when it was at $70K would have a lot of trouble sleeping today.

He could be accused of trying to pump his investment with these messages to the masses, and I doubt it is illegal, but I think it is morally reprehensible.

[Lucius]

And the popularization of the idea that you have to borrow from anything to buy Bitcoin? He even advocates that you mortgage your house to buy Bitcoin.
At the time it caught my attention and when I found him more convincing, it was something I didn't agree with, but seen today it seems like nonsense.

We keep saying that it is wise to invest only what you are willing to lose, and that it is not wise to borrow money for any risky investments. This is true and should be applied to any small investor who is generally very bad when it comes to his personal finances, but for a company like MicroStrategy some other rules still apply regardless of how things look pretty bad for them at the moment.

It's one thing Frank Giustra threw in his face in the Gold vs Bitcoin debate: throwing that message out there is dangerous for the masses. Some innocent person who believed his message and mortgaged his house to buy Bitcoin when it was at $70K would have a lot of trouble sleeping today.

There is no doubt that there are a lot of gullible people who believe in everything they hear, and I agree that every public figure should be careful with their statements, especially when it comes to anything related to investing. However, it should be noted that Saylor has only 2.5 million followers on Twitter and is not very popular compared to some other social networks stars that have tens of millions of followers. It is therefore possible that his statements are mostly followed by people who are somewhat financially educated and know that it is not wise to put all the eggs in the same basket.

He could be accused of trying to pump his investment with these messages to the masses, and I doubt it is illegal, but I think it is morally reprehensible.

If we looked at things that way, Musk would already be behind bars, not only because of his own and more than obvious pumping of a certain altcoin, but also because of what he did before 2018 with his company's shares using just Twitter. I don’t see Saylor being nearly as dangerous with his statements, and even all of his investments in Bitcoin go pretty unnoticed and without affecting the price.

[fillippone]

Micheal Saylor detailed the 10 bullet points of his strategy in a few interviews recently released.

Micheal Salyor decalogue for a 10x Bitcoin Appreciation

I guess this is a way to communicate to Microstrategy stakeholders they have a strategy which has been carefully planned, and it's is not only a faith-based buy and hold.
Also, It's a way to make shareholders digest the current price volatility, which is going to play massively in their favour once the objective nears.

[NeuroticFish]

According to my computation the recent sell off in Bitcoin is going to cost huge money to MicroStrategy:

And according to Michael Saylor's latest tweet, MicroStrategy keeps DCA-ing like everything is normal
They've just bought (yesterday) 480BTC so their total is around 129,699BTC and the average price is ~30,664$

[fillippone]

Microstrategy resumed buying in small clips since a long time.
As already Noted, Micheal Saylor has a strategy, and this strategy implies CDAing every purchase.

[JayJuanGee]

According to my computation the recent sell off in Bitcoin is going to cost huge money to MicroStrategy:

And according to Michael Saylor's latest tweet, MicroStrategy keeps DCA-ing like everything is normal
They've just bought (yesterday) 480BTC so their total is around 129,699BTC and the average price is ~30,664$

Yep... Everything is within a fair range of normal, and for sure if there was a conclusion to buy a bunch of coins in the $50ks (which Saylor/MSTR did), there should be even greater justifications to be buying coins in the lower $20ks and even at lower prices if the BTC price goes lower, again.

Relatively soon after Saylor became public with his various August 2020 announcements about MSTR's relatively aggressive entrance into BTC from that time and soon thereafter, I had been struck by the level of his/MSTR's aggressiveness in buying BTC - which I had been trying to weigh in comparison to my own (of course MSTR is working with something like thousands of times greater budget than myself and other individuals, and they seem to be able to create financial instruments that individuals would not be able to create as easily to entice investors).  

The punchline remains that on a personal level, I continue to be able to relate - even though from my own comparative perspective, it seem that MSTR had entered into BTC at a much better time than myself - in terms of the location of the cycle - and even if some folks try to give MSTR/Saylor credit for pushing the BTC price up from $10k to $69k, who fucking cares, the fact of the matter is that the BTC price was going up as they were getting their initial stake into BTC, which may have even attributed to their looking like greater geniuses than myself, when I had started investing in late 2013 and the BTC price had been going down for the next year and then ending up relatively flat for the next year and a half. ...

and maybe we (my lil selfie and MSTR)  still end up in some kind of a similar place (referring to percentages)? even though I still consider MSTR to be doing quite a bit better than what I had been doing at nearly 2 years into my BTC journey.. but still maybe they will still end up in a similar place as me in terms of percentages (even if working with larger numbers) if the BTC price goes down some more (I have my doubts about how far the BTC price can go down or even stay down, but hey nearly anything is possible, for sure) .  

Essentially, MSTR is in the hole, currently around 33%-ish in the hole, and I had spent most of 2015 in the hole at more than 50%.. because my average cost per BTC started out late 2014 at about $570-ish, and by the end o f 2015, my average cost per BTC was around $500-ish.. and the reason that my average cost per BTC came down by that much is because I continued to buy BTC even though the seemingly depressing period of time in 2015 that the BTC price in the mid $200s was amore than 50% cheaper than mine average costs per BTC during that whole period.

Quite a few times bulltards (not meaning to be hostile to bulltards) had ben proclaiming (misrepresenting) that MSTR had been buying the dip, and blah blah blah.. even though michael and MSTR had several times asserted that they had not been very price sensitive.  Accordingly, between August 2020 and early 2022, MSTR were buying BTC at any price with whatever cashflow that they had available (or could get their hands on), and surely MSTR and Saylor may have been learning a lesson that maybe they should have been buying the dip (or attempting to be more strategic in terms of their then ongoing lack of price sensitivities) rather than just buying BTC at any price - and I am not even blaming Saylor /MSTR because even though Saylor is smart as fuck when it comes to being able to coherently articulate great reasons to have aggressive allocations into into BTC, at the same time MSTR/Saylor seemed to have had gotten caught up in a decent amount of the hype too which seems to have had contributed to some of what seems to be rookie mistakes in terms of recognizing some benefits to attempting to be more strategic about the price (and buying on the dip, perhaps?).

Saylor's/MSTR's buying the dip now seems to be the right thing to do, and personally, I would have found it to have been even more of a rookie mistake if MSTR/Saylor had not bought this current dip.. so in some sense it seems to me that MSTR is being a bit more whimpy in their buying ONLY $10 million  in this current dip as compared with how much BTC they were buying in the $50ks.. and yet ist is not easy to blame them for buying in the $50ks either because surely BTC prices could have gone up from there too and reached $250k and higher and never come back down to $50k and below prices.

For sure some dry powder needs to be saved in case the BTC price goes lower, but at the same time these seem to be buying opportunities currently in front of us.. because there is no guarantee that BTC prices are going to go lower, and we may well end up bottoming out somewhere in these price areas and some folks will be kicking themselves if they did not buy any BTC in these times of admitted ongoing uncertainties.  I know the feeling about how hard it was to continue to buy BTC throughout 2015 with spare cashflow while at the same time also keeping some spare cash available in case the BTC price dips lower...There seems to be a bit of a dilemma, and I have difficulties considering that sitting on your hands would be any kind of a prudent solution, especially for any company and/or person who is still generating regular ongoing cashflows (Saylor/MSTR seems to be generating regular ongoing cashflows)...

and by the way, I also know the feeling that if I had done most of my stacking of BTC in 2014, so by the time 2015 came, I did not have a lot of cashflow or resources remaining, so each stacking in 2015 seemed to have been a kind of stacking for ants relative to the size of the overall BTC portfolio.. and surely Saylor's/MSTR's stacking of $10 million at a time is comparable to my 2015 stacking of much smaller amounts, but a similar situation relative to the size of my overall BTC size.. and just continue to stack small amounts, while underwater and continue to hold some fiat just in case the BTC price goes lower and there might be some difficulties considering if there might be some extra resources that can be prudently deployed towards BTC because the vast majority of the arguably prudent resources had already been deployed at higher prices.

[fillippone]

After the Wall of text from @JayJuanGee, a wall of images:

Here is a brief recap of MSRT Buying History:




Also, an update on impairment losses.



Please note that the latest buy has already caused a good half a million impairment loss.

[NeuroticFish]

After the Wall of text from @JayJuanGee, a wall of images:

LOL!

I don't remember if that's your G Sheet or not, but if it is, please make column D a bit larger so it fits the larger numbers
(Actually checking/ensuring all of those may not hurt either).

[aysg76]

According to my computation the recent sell off in Bitcoin is going to cost huge money to MicroStrategy:

The current loss could yeild a million dollars profits also for MSTR with bitcoin boosting and he knows this fact so taking these risks is well paid off.But still bitcoin needs to surpass atleast $30k levels and then they will be in some real profits otherwise they can risk out some more to gain more

And according to Michael Saylor's latest tweet, MicroStrategy keeps DCA-ing like everything is normal
They've just bought (yesterday) 480BTC so their total is around 129,699BTC and the average price is ~30,664$

He is always waiting for these opportunities to invest and you could see his Twitter wall filled with all the bitcoin optimistic tweets and advocating about it.He once again jumped in to buy these additional bitcoins and now is the top institutional bitcoin holding investors only due to him.The bitcoin spark in his eyes is to accumulate more and more bitcoins at these discounted rates.

[salad daging]

And according to Michael Saylor's latest tweet, MicroStrategy keeps DCA-ing like everything is normal
They've just bought (yesterday) 480BTC so their total is around 129,699BTC and the average price is ~30,664$

He is always waiting for these opportunities to invest and you could see his Twitter wall filled with all the bitcoin optimistic tweets and advocating about it.He once again jumped in to buy these additional bitcoins and now is the top institutional bitcoin holding investors only due to him.The bitcoin spark in his eyes is to accumulate more and more bitcoins at these discounted rates.

Tweets full of optimism indeed Michael Saylor, even he says he never gets bored, bitcoin has always been a trust and he will continue to buy at lower prices to continue to collect bitcoins regularly and the total he has is so much, just imagine if it rises to early 2021 again that would be a huge advantage because that's Microstrategy.
For him it is never too late for bitcoin.

[fillippone]

After the Wall of text from @JayJuanGee, a wall of images:

LOL!

I don't remember if that's your G Sheet or not, but if it is, please make column D a bit larger so it fits the larger numbers
(Actually checking/ensuring all of those may not hurt either).

That was done:



Yes, of course, the spreadsheet is mine.
All the content in my thread is carefully crafted by me.
So if you notice something inaccurate, subpar or sloppy (this is very possible, as you have just seen), let me know so I can fix it.

[darxiaomi]

Well im not following so much the MicroStrategy thing but.

I see a lot of you share the balance sheet and its ok but.... for me that says nothing. If the companie doesnt use that funds for keep making the companie runs its not problem. The only problem comes when you use your "saves" for make the companie work.

Its for that we see this new companies like 3 arrows and a lot more going bankrup, because they use the bull market and the "saves in crypto" to expands and growing with a shit business plan.

Lets me explain my point with a traditional one.

We see ever the press saying. "X company lost about 15000 billions of dollar of value" so in our minds we thing this company its near to die. And that can be true or can be a big lie.

Lets take Gazprom for example. They lost a ton of "market value" but the market value affects 0 to the companie if they dont need to claim a "loan" in the market. The only way this affect and can destroy a companie its when you have a open loan and you want to close this one selling your shares on the stock market.  ONLY in that case this affect you directly.

Coming back to the crypto companies and their shit business plan. A ton of companies make this.

1- Taking a loan to expand the companie (seems good)
2- Think and put to cover that loan their saves and their principal active (cryptos), always thinking in bull market so they think can easily close the loan. (imprudent decision)
3- The Bear market comes, your principal active and your flow of cash goes to crash, you cant repay the money you borrowed so you crash.
4- His passive is now more than before because now your companie its much bigger (point 1 you thing for a long run of bull market) and you have less clients so inevitable crash.

So, i dont know if this its the case of Microstrategy if they only continue to accumulate wealth in bitcoin and dont have any open loan or need of cash to close some accounts i dont see any problem.

I hope i explain my point in a good manner. its quite difficult to me to writte in english such a complicated thing.

[JayJuanGee]

Well im not following so much the MicroStrategy thing but.

I see a lot of you share the balance sheet and its ok but.... for me that says nothing. If the companie doesnt use that funds for keep making the companie runs its not problem. The only problem comes when you use your "saves" for make the companie work.

Its for that we see this new companies like 3 arrows and a lot more going bankrup, because they use the bull market and the "saves in crypto" to expands and growing with a shit business plan.

Lets me explain my point with a traditional one.

We see ever the press saying. "X company lost about 15000 billions of dollar of value" so in our minds we thing this company its near to die. And that can be true or can be a big lie.

Lets take Gazprom for example. They lost a ton of "market value" but the market value affects 0 to the companie if they dont need to claim a "loan" in the market. The only way this affect and can destroy a companie its when you have a open loan and you want to close this one selling your shares on the stock market.  ONLY in that case this affect you directly.

Coming back to the crypto companies and their shit business plan. A ton of companies make this.

1- Taking a loan to expand the companie (seems good)
2- Think and put to cover that loan their saves and their principal active (cryptos), always thinking in bull market so they think can easily close the loan. (imprudent decision)
3- The Bear market comes, your principal active and your flow of cash goes to crash, you cant repay the money you borrowed so you crash.
4- His passive is now more than before because now your companie its much bigger (point 1 you thing for a long run of bull market) and you have less clients so inevitable crash.

So, i dont know if this its the case of Microstrategy if they only continue to accumulate wealth in bitcoin and dont have any open loan or need of cash to close some accounts i dont see any problem.

I hope i explain my point in a good manner. its quite difficult to me to writte in english such a complicated thing.

I don't understand every single point that you made, but it seems to me that you make a lot of good points in terms of the various ways to attempt to assess the value of a company, and sometimes certain indicators (or ways of looking at the company's valuation) can be misleading in terms of whether the shares go up or down in their market price and whether the assets held by the company are valued fairly valued and/or understood and also considering whether they have cashflows and if the cashflows have been affecting by the changes in the market (or current market conditions).

Not everyone is going to assess a company in similar ways, and surely some of the investors will be right and others will be wrong in their assessment. Surely Microstrategy does hold a very unique position in the bitcoin space and even in comparison to a lot of other similar companies, and for sure it is not unreasonable tfor some folks to consider Microstrategy to be a way of investing in bitcoin (or shorting  bitcoin) when they might NOT be able to buy bitcoin directly.. It does seem like it would be a bit redundant if someone were to own bitcoin and also to own MSTR, but there are people who likely do that, too.

This last $10 million appears to have been bought by MSTR extra cashflow, and I am not really sure if MSTR is holding back some of their cash reserves for further dips in the BTC price because there still does remain quite a bit of uncertainty regarding if the BTC price bottom is in or close to being in., so even MSTR and their bitcoin staff (beyond Saylor) might surely assess the BTC market differently from a layperson (or a bitcoin OG), too... but I am not sure if MSTR would be more likely to be correct in their assessment, or not.  They surely are not dummies when it comes to bitcoin or even their continuing to be able to generate decent cashflow/profits from their software business either.

[darxiaomi]

Yes but you understand the main thing i want to show.

I only put the Gazprom example because its quite easy to demostrate.

The shares on the stock market of Gazprom go down because the war, but their cashflow go ultra up because of the war and the increase of the oil prices. (yes i know with the embargo the cant sell in a lot of parts) But your undestand my point. And with the mayority of the shares in hands of one (in  this case the russian goverment) they dont give a shit to the opinion of the holders.

Well with all this parabolic explanation, i see the same in some companies like maybe Microstrategy. So they can still operate and keep buying more BTC with his normal cashflow or saves, thinking in  the long run.

[fillippone]

In some way, Micheal Saylor is the Russian Government of Microstrategy.
As long as no shareholders can legitimately overturn his will, the decisions is only his own.
And as long as he wants to accumulate bitcoin, which is the only strategy, according to his interviews, we can be sure no Bitcoin will leave Microstrategy self custody.

[The Sceptical Chymist]

In some way, Micheal Saylor is the Russian Government of Microstrategy.
As long as no shareholders can legitimately overturn his will, the decisions is only his own.
And as long as he wants to accumulate bitcoin, which is the only strategy, according to his interviews, we can be sure no Bitcoin will leave Microstrategy self custody.

How much stock in MSTR does Michael Saylor own, exactly?  I think I can look that up easily, but I'm not exactly sure where at the moment and if it was ever written in this thread, there's no way I'm going to re-read everything here.

But if he doesn't own 100% of the company (true, right?) and the company is a publicly-traded one (true), then he's still accountable to his shareholders.  Period.  If he looks at MSTR as a vehicle for his own passion for bitcoin, the minority shareholders might feel just a little bit burned now that bitcoin is below $20k.  And I'm telling you, I'm watching a webcast of him right now and he's really pushing it with all that he's saying--it's as if he's describing MSTR as a fucking bitcoin casino!

Don't believe me?  Just wait until the shareholder lawsuits start popping up, which I can almost guarantee will happen sooner or later.

[Falconer]

But if he doesn't own 100% of the company (true, right?) and the company is a publicly-traded one (true), then he's still accountable to his shareholders.  Period.  If he looks at MSTR as a vehicle for his own passion for bitcoin, the minority shareholders might feel just a little bit burned now that bitcoin is below $20k.  And I'm telling you, I'm watching a webcast of him right now and he's really pushing it with all that he's saying--it's as if he's describing MSTR as a fucking bitcoin casino!

Don't believe me?  Just wait until the shareholder lawsuits start popping up, which I can almost guarantee will happen sooner or later.

I think your logic is correct regarding the current situation Saylor and her company are in which have consistently invested in bitcoin so far. As long as bitcoin still benefit their shareholders, I don't think there's anything to think about. But the situation will be different because now bitcoin is under $20K so there's a good chance he and his company are in trouble.

I can imagine if it happened to MicroStrategy and Saylor then bitcoin would have a pretty big impact considering there was a massive sell-off caused by the rise of FUD. Saylor will never become a bitcoin holder without selling anything, so since not all of the shares she owns are 100% hers, it's likely that some of the bitcoin will be sold to balance out her financial situation.

[fillippone]

In some way, Micheal Saylor is the Russian Government of Microstrategy.
As long as no shareholders can legitimately overturn his will, the decisions is only his own.
And as long as he wants to accumulate bitcoin, which is the only strategy, according to his interviews, we can be sure no Bitcoin will leave Microstrategy self custody.

How much stock in MSTR does Michael Saylor own, exactly?  I think I can look that up easily, but I'm not exactly sure where at the moment and if it was ever written in this thread, there's no way I'm going to re-read everything here.

But if he doesn't own 100% of the company (true, right?) and the company is a publicly-traded one (true), then he's still accountable to his shareholders.  Period.  If he looks at MSTR as a vehicle for his own passion for bitcoin, the minority shareholders might feel just a little bit burned now that bitcoin is below $20k.  And I'm telling you, I'm watching a webcast of him right now and he's really pushing it with all that he's saying--it's as if he's describing MSTR as a fucking bitcoin casino!

Don't believe me?  Just wait until the shareholder lawsuits start popping up, which I can almost guarantee will happen sooner or later.

Microstrategy has two different class of stocks.
According to 2021 Annual Report:

We have two classes of common stock: class A common stock and class B common stock. Holders of our class A common stock
generally have the same rights as holders of our class B common stock, except that holders of class A common stock have one vote per
share while holders of class B common stock have ten votes per share. As of February 1, 2022, holders of our class B common stock
owned 1,964,025 shares of class B common stock, or 67.8% of the total voting power. As of February 1, 2022, Mr. Saylor, our Chairman
of the Board of Directors & Chief Executive Officer, beneficially owned 1,961,668 shares of class B common stock, or 67.7% of the
total voting power. Accordingly, Mr. Saylor can control MicroStrategy through his ability to determine the outcome of elections of our
directors, amend our certificate of incorporation and by-laws, and take other actions requiring the vote or consent of stockholders,
including mergers, going-private transactions, and other extraordinary transactions and their terms.

Class A are ordinary shares, while a single class B share grants 10 voting rights:
So:



There is a little discrepancy in the number as I think my numbers are a little bit more updated than those on the annual report.