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

[fillippone]

MicroStrategy Buys Tranche #12:




https://twitter.com/michael_saylor/status/1392814015181635584?s=21

[1713535548]

1713535548

[1713535548]

1713535548

[1713535548]

1713535548

[1713535548]

1713535548

[NeuroticFish]

MicroStrategy Buys Tranche #12:

As usual, great move from their side. It was kind of expected though, they've got specialized lately to buy the dip.

[fillippone]

MicroStrategy Buys Tranche #12:

As usual, great move from their side. It was kind of expected though, they've got specialized lately to buy the dip.

According their own statement, claiming a 55k median price, they bought just before the dip.
Nothing changes in the grand scheme of things, by the way.

[The Sceptical Chymist]

According their own statement, claiming a 55k median price, they bought just before the dip.

I've said this before, I respect them for their devotion and balls to buy bitcoin in such huge amounts, but I wonder what MSTR's shareholders think about it--especially when they bought a decent amount right before a dip.  I can't imagine that would make any shareholder happy.

I just took a look at the 6 month price chart of MSTR and it looks like it's been declining steadily, at least as of late.  My screenshot function is somehow screwed up, and it wouldn't let me take a shot of the chart, but there was this little note on my brokerage's page for MSTR:



So it seems very much like their stock price is intimately tied to bitcoin's price.  I don't know if that's what MicroStrategy intended or what their stockholders expected, but that seems to be the reality of it.  

[oHnK]

MicroStrategy Buys Tranche #12:




https://twitter.com/michael_saylor/status/1392814015181635584?s=21

They seem very stable in investing in crypto.  Their consistency is worthy of appreciation in the improvement and advancement of Crypto in the eyes of the world.  Meanwhile, on the other hand, Tesla and Elon Musk continue to play in their investment in crypto.  Today the decline is over 10% for BTC, meaning that we have lost 0.27 T USD already and this is a big blow this month.  Many investors lost money as a result of Elon's tweet.  Micro has bought 400 M USD of BTC and this is not enough to help boost the market.  If future buying is sustained, it may recover soon or even worsen the market.

[JayJuanGee]

MicroStrategy Buys Tranche #12:

As usual, great move from their side. It was kind of expected though, they've got specialized lately to buy the dip.

Hahahaha

I doubt that they (seeming policies led by Saylor) are giving too many shits about whether BTC prices are dipping or not when they buy their monthly-ish installations of BTC (and I doubt that they are even necessarily waiting for the month to play out in the event that they were to get extra cashflows during the month, we likely can appreciate where they might be putting that extra cashflow and just reporting it on a monthly basis or whatever). 

So, surely a lot of normies get all worked up about dollar cost average buying in such a way that the average price per coin is shooting way up, but Saylor et al, seems to give few to no shits about that.   By the way, I personally believe that normies cannot really emulate Saylor's behavior exactly, unless they happen to have excessive regular cashflows, but still Saylor's behavior should demonstrate for any fence sitters (whether institutions or individuals) that some bitcoin enlightened players are not going to be having any mercy to be waiting around for the price to drop when they are buying their bitcoin, even if it causes their average dollar price per BTC to go up or even more than double because they are ongoingly buying at almost any price.. so fence sitters are likely going to be damaged considerably if they don't rectify their fence sitting behaviors and put systems in place that they can start getting a bitcoin stake, sooner rather than later.
 
Remember the first installation of Saylor et al had achieved average BTC prices of less than $10k, and then the next one brought the average to $11,111.11 (yes it seems fictional.. and maybe it is, I don't know, just remember that number for some strange reason), and then they keep buying at whatever is the price of the day/week in which they are buying which may or may not end up being a "dip".. so little by little their average price per BTC has gone up while the size of their stash has gone up too... and yes, it is nice to be able to both see that their average price per BTC is now $24,403, they have made several purchases at various points in the $50ks (high, low, middle, whatever the BTC price happens to be in the period that they were buying), and they just keep plodding along with either a vision that we are not at a price top or maybe not even caring if we might be at a top since their investment timeline is way into the future - perhaps even beyond the timeline of their servicing of their couple of 5 year bonds - which they can likely service, even if BTC prices were to drop by 80% or whatever (which also does not seem to be too likely in our current BTC price posturing situation).

[Karartma1]

I only hope Michael Saylor will never go full-elon! We need more fellas like Michael who are in for the tech and the economics about Bitcoin!
I mean Elon pumped the worst shitcoin ever what good could we expect from him?

[JayJuanGee]

According their own statement, claiming a 55k median price, they bought just before the dip.

I've said this before, I respect them for their devotion and balls to buy bitcoin in such huge amounts, but I wonder what MSTR's shareholders think about it--especially when they bought a decent amount right before a dip.  I can't imagine that would make any shareholder happy.

I just took a look at the 6 month price chart of MSTR and it looks like it's been declining steadily, at least as of late.  My screenshot function is somehow screwed up, and it wouldn't let me take a shot of the chart, but there was this little note on my brokerage's page for MSTR:



So it seems very much like their stock price is intimately tied to bitcoin's price.  I don't know if that's what MicroStrategy intended or what their stockholders expected, but that seems to be the reality of it.  

Seems to me that over the past 9 months or so, Saylor (in terms of speaking on behalf of Microstrategies) has been unambiguously clear that he is bullish as fuck about bitcoin and he provided many opportunities (which would include his fairly regular reports about what microstrategies is doing regarding buying bitcoin) that if anything he is becoming more and more bullish about bitcoin with the passage of time and his investment into bitcoin is long term rather than short or medium term and not giving shits about dips because likely in the longer term (whether it takes 5 years or maybe even longer) that it is all going to work out for him and his company to be leveraged (or even over leveraged in bitcoin) in spite of possible short to medium term BTC price movements.. And for sure, these 25%-ish price corrections (even if he did not buy at the actual dip) do not challenge bitcoin's investment thesis in any kind of meaningful way because they are even quite smaller than the size of price corrections that have historically taken place whether we are referring to size of correction or even how long the price correction drags out.


Sure, if BTC prices were to go below his average purchase price and also stay below his average purchase price for a considerable amount of time (even if he were to keep buying if the BTC price were to go below $20k, for example), he may well have to reconsider some of his approach to being so aggressive about BTC, including whether backlash from shareholders might be resulting in attention from regulators, lawsuits, threats to his executive position or even if the cashflow from his regular company business is not sufficient to service the debt that was issued, but still seems to me that Saylor has gone quite overboard in ongoingy disclosing his BTC approach, so  surely shareholders or anyone else have that information and should be able to bail if they do not agree with the philosophy or they are shaken by short term performance numbers.

[NeuroticFish]

I doubt that they (seeming policies led by Saylor) are giving too many shits about whether BTC prices are dipping or not when they buy their monthly-ish installations of BTC (and I doubt that they are even necessarily waiting for the month to play out in the event that they were to get extra cashflows during the month, we likely can appreciate where they might be putting that extra cashflow and just reporting it on a monthly basis or whatever). 

I would be surprised if they wouldn't, at least a little. And I remember that this is not the first such announcement coming out just after a dip. I mean that it would be stupid to not try to save millions of $ here and there. On the other hand, they may just DCA on a different scale.

But yeah, fillippone is right and this time the price is from before the dip...

[JayJuanGee]

I doubt that they (seeming policies led by Saylor) are giving too many shits about whether BTC prices are dipping or not when they buy their monthly-ish installations of BTC (and I doubt that they are even necessarily waiting for the month to play out in the event that they were to get extra cashflows during the month, we likely can appreciate where they might be putting that extra cashflow and just reporting it on a monthly basis or whatever). 

I would be surprised if they wouldn't, at least a little. And I remember that this is not the first such announcement coming out just after a dip. I mean that it would be stupid to not try to save millions of $ here and there. On the other hand, they may just DCA on a different scale.

But yeah, fillippone is right and this time the price is from before the dip...

Sure, each of us may have differing ways of attempting to assess whatever announcements had been made, so for example, if BTC prices had NOT really gone below $55k (just a day or two ago, I will remind you), then people might have been proclaiming that Saylor et al is a genius for buying on the dip, blah blah blah.. because in some sense, the price of $55k-ish could be considered a dip from $59k-ish or a dip from $64,895-ish.

So, sure there could be some getting in digs for Saylor to be announcing that his company "recently" bought $10million or $20million or whatever at a price that is  higher than the current price, but still there could be some company internal dynamics that Saylor just announces whenever his "btc buying department" has put the numbers together in order that he does not misstate what his company has done in "recent times" which just happens to coincide with a dip or a before the dip or an after the dip or whenever such data has been put together in order that it happens to be ready for disclosure (even if he might be disclosing way more frequently than is even necessary to "keep everyone happy"), Saylor et al has seemed to have taken an approach that seems to be pretty damned frequent disclosures, and just let the chips fall where they will.

Even Saylor et al, may become a bit frustrated (perhaps?) if his company keeps buying, keeps announcing that they are buying, but the BTC price keeps ongoingly cascadingly falling lower than his buy price on a regular basis, and none of us (even Saylor) can know when the correction is over until perhaps when it has recovered sufficiently enough to make it clear that the correction is over... sometimes taking three years or so before the downward cascading ends.. hopefully such 3 year downward cascading is not happening at this time, but who knows?  Nothing is guaranteed in bitcoinlandia even if it seems very likely that we are currently in the middle of a bull run rather than at the end of a bullrun, but we cannot even know that until the whole matter plays out which actually can take a year or longer to even identify where we are at or to revise a previous assessment of where we thought we were and where we actually think that we are based on updated data.

[Upgrade00]

*Updating for the OP

Microstrategy buys tranche number 13 which takes their total holdings to over 92k bitcoins;
"MicroStrategy has purchased an additional 229 bitcoins for $10.0 million in cash at an average price of ~$43,663 per #bitcoin.  
As of 5/18/2021, we #hodl ~92,079 bitcoins acquired for ~$2.251 billion at an average price of ~24,450 per bitcoin."

[fillippone]

MicroStrategy Buys Tranche #13:




https://twitter.com/michael_saylor/status/1394625128257007618?s=21

Spreadsheet updated

[oHnK]

Based on the spreadsheet that you created https://docs.google.com/spreadsheets/d/1fmYF8ND3lGHeZCzNww8chtiz7ZvbhSAzXOHKPkKDVF8/edit?usp=drivesdk ,  I have seen that the proportion of Microstrategy ownership in BTC is over 2.2 B USD, while Tesla is 1.5 B USD.  As far as I know, Tesla has sold 10% of its ownership so that the value should have been reduced, but I don't see any changes to Tesla's ownership.  Did I miss something?  CMIIW

[fillippone]

Based on the spreadsheet that you created https://docs.google.com/spreadsheets/d/1fmYF8ND3lGHeZCzNww8chtiz7ZvbhSAzXOHKPkKDVF8/edit?usp=drivesdk ,  I have seen that the proportion of Microstrategy ownership in BTC is over 2.2 B USD, while Tesla is 1.5 B USD.  As far as I know, Tesla has sold 10% of its ownership so that the value should have been reduced, but I don't see any changes to Tesla's ownership.  Did I miss something?  CMIIW

Point taken.
I hadn't updated the spreadsheet in a while.
Now it's done, and actually, I improved my estimates a little bit.
Hope you like it.

[The Sceptical Chymist]

I can imagine if MicroStrategy announces something like Musk on May 12th. Dump will be powerful.

Uh, yeah.  If MSTR were to sell a substantial amount of bitcoin right now, it would be in serious trouble--more so than it looks like it already is (it's at $36,740 right now).

Just thinking out loud here, I imagine MSTR's CEO is one of the biggest bitcoin bulls I've ever seen, but he is head of a publicly-traded company with shareholders he's accountable to.  MSTR's share price hit $1300 back in February, and right now it's $452.  I doubt shareholders are happy with the decline, and I bet many of them attribute it to bitcoin's slide.  What would happen if the board of directors decided to boot Michael Saylor?  What would happen if there was a shareholder revolt?  It's not inconceivable that MSTR would be forced to sell at least some of its bitcoin holdings. 

I'm not hoping that happens, just saying that it could.  If bitcoin continues its downward trajectory, it would become even more likely IMO.

[jaysabi]

I can imagine if MicroStrategy announces something like Musk on May 12th. Dump will be powerful.

Uh, yeah.  If MSTR were to sell a substantial amount of bitcoin right now, it would be in serious trouble--more so than it looks like it already is (it's at $36,740 right now).

Just thinking out loud here, I imagine MSTR's CEO is one of the biggest bitcoin bulls I've ever seen, but he is head of a publicly-traded company with shareholders he's accountable to.  MSTR's share price hit $1300 back in February, and right now it's $452.  I doubt shareholders are happy with the decline, and I bet many of them attribute it to bitcoin's slide.  What would happen if the board of directors decided to boot Michael Saylor?  What would happen if there was a shareholder revolt?  It's not inconceivable that MSTR would be forced to sell at least some of its bitcoin holdings. 

I'm not hoping that happens, just saying that it could.  If bitcoin continues its downward trajectory, it would become even more likely IMO.

I'm not sure how accountable he is to shareholders really. He has so much voting control over the company that nobody can get on the board without his approval and so there are effectively no checks on him.  It's impossible for any combination of shareholders to ever own enough voting control to make him accountable to anyone.

[fillippone]

I can imagine if MicroStrategy announces something like Musk on May 12th. Dump will be powerful.

Uh, yeah.  If MSTR were to sell a substantial amount of bitcoin right now, it would be in serious trouble--more so than it looks like it already is (it's at $36,740 right now).

Just thinking out loud here, I imagine MSTR's CEO is one of the biggest bitcoin bulls I've ever seen, but he is head of a publicly-traded company with shareholders he's accountable to.  MSTR's share price hit $1300 back in February, and right now it's $452.  I doubt shareholders are happy with the decline, and I bet many of them attribute it to bitcoin's slide.  What would happen if the board of directors decided to boot Michael Saylor?  What would happen if there was a shareholder revolt?  It's not inconceivable that MSTR would be forced to sell at least some of its bitcoin holdings.  

I'm not hoping that happens, just saying that it could.  If bitcoin continues its downward trajectory, it would become even more likely IMO.

I'm not sure how accountable he is to shareholders really. He has so much voting control over the company that nobody can get on the board without his approval and so there are effectively no checks on him.  It's impossible for any combination of shareholders to ever own enough voting control to make him accountable to anyone.

Zero. He's not accountable at all. Otherwise, how could you explain the fact he's one of the longest surviving CEO in the market, surviving a 90% drop in the share price? Basically, Microstrategty is the "armed arm" of Micheal Saylor, who can use the company as a private playground.

Eventually, MSRT one day will sell (part of) their bitcoin, it's inevitable, the important thing is not creating (temporary) imbalances.

[JayJuanGee]

Just thinking out loud here, I imagine MSTR's CEO is one of the biggest bitcoin bulls I've ever seen, but he is head of a publicly-traded company with shareholders he's accountable to.  MSTR's share price hit $1300 back in February, and right now it's $452.  I doubt shareholders are happy with the decline, and I bet many of them attribute it to bitcoin's slide.  What would happen if the board of directors decided to boot Michael Saylor?  What would happen if there was a shareholder revolt?  It's not inconceivable that MSTR would be forced to sell at least some of its bitcoin holdings.  

Perhaps Saylor does not panic and maintains his status as a holder because he knows something. Perhaps he knows roughly when this correction will end and that they will be able to close the financial year without losses for their investors.

For sure, I am NOT proclaiming that Saylor is equal to normies, and so merely based on his billionnaire (rockstar) status and his employment of a variety of experts in the BTC space, he is likely getting access to a variety of decent and insider information, but as far as the BTC price market and when the correction is going to stop, no body knows that.  They might know about when certain insider things might happen that we regular peeps do not know about beyond conjecture, but still there is absolutely no evidence that Saylor is playing around with his stash in terms of trading it and his outward actions seem to largely be what he is doing.. which is just ongoingly accumulating BTC.

But we also don't forget Saylor's early statements that they are ready to sell all their bitcoins at any time, if necessary.

I doubt that any CEO of a public company is going to want to tie their hands - so they both create instruments that give them as much flexibility as they can reasonably get away with and they also make statements to assure that they will do whatever it takes to preserve shareholder value etc. etc. etc.  Sure, diptwat Elon, seems to be somewhat of an exception to be making statements that seem to show that he is reckless as fuck and doesn't give any shit about shareholder value.. or whatever the Elon statements were meant to accomplish.

I am just repeating myself to assert once again that even if the financial instruments and even the words of Saylor is to assert that he has flexibility to do whatever the fuck he wants in terms of selling, he has no intention to sell for a long time (yeah, I don't believe that 100 year bullshit, because Saylor will be lucky to have competency for another 40 years - suggesting that if he lives as long (and is active in the space) for as long as Buffet or Munger.

After all, why did they buy it, including for hedging macro-economic risks. If MicroStrategy starts selling their bitcoins, I expect the BTC price to be around $ 16-19k.

I agree with you about their having had bought BTC to hedge for macro-economic risks, but something seems wrong with your so easily crossing into the territory (or mindset) or Microstrategies selling on the way down.. in the event that BTC were to go down to those levels.. which also seems to be a pretty BIG assumption.

I will kind of agree with you about a kind of presumption that Microstrategies may have overdone themselves in terms of the quantity of their BTC buys, but they surely seem to have the cashflows to service the debts that they created for themselves and also they just moved cash reserves into bitcoin - sure maybe a bit more than prudent, but those cash reserves are largely continuing to hold value - so sure once the BTC price goes below $24k, then they are in the negative, but I doubt that that would justify selling at a loss rather than hanging onto bitcoin for at least a few years .. and sure if after a few years (maybe even 5-6 years?) bitcoin is not holding its value relative to the dollar, then they may have to well rethink their investment thesis - NOT that they even have to wait 5-6 years to reassess their BTC investment thesis, but I doubt that they are questioning themselves on a regular basis, merely because BTC prices are currently correcting, as you seem to be necessary for them to do.. their likely action in the coming months or even year or two (presuming that BTC prices stay stagnant) would be just to continue to DCA buy BTC with whatever percentage of their cashflow that they deem to be ongoingly prudent for their circumstances.

[noorammak]

I have to admit MicroStrategy is a great company that consistently buys Bitcoin when the price drops and has positive feedback from people who can show their absolute faith in Bitcoin. To date, they have purchased billions of dollars with an average value of $44k.
I think they are an investment company with a long-term strategic vision. I believe they will be right as they are the largest whales that I know of. I hope this price drop is finally testing support so that Bitcoin can rally sharply to achieve a higher ATH.

[oHnK]

Eventually, MSRT one day will sell (part of) their bitcoin, it's inevitable, the important thing is not creating (temporary) imbalances.

It is inevitable that there will be times when MSTR will sell the BTC they have held.  So far what I have seen from the spreadsheet that you have created, they have bought BTC for an average price of 24,450 USD and per price of 37k alone they have achieved an unrealized gain of 1 T USD.  The estimated time for them to sell their BTC is when their portfolio is losing.  Because if they lose just 1%, then they have lost 25 M USD.  It's not a small amount, but the good side is why they hold on because what investment can generate 1 T USD in just 1 year if not BTC.