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[Symmetrick]

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[mu_enrico]

SimpleWall.st has placed MicroStrategy red flags and called its shares overvalued. Also, there was a low return on equity.

Agree with the red flag because cash flows from investing activities generally insignificant compared to cash flows from operating activities, especially if they are a software company. Hence, using Bitcoin as a hedge should not affect their bottom line that much (well, except Bitcoin price increase 10x or whatever) -> no price jump.

What they should do is to sell more products, well, since they are already interested in Bitcoin, why not create useful software for trading/Bitcoin community!

[The Sceptical Chymist]

MicroStrategy's transition to the bitcoin market also signals that large companies are increasingly interested in cryptocurrency.

I'm not sure that's really the case.  MSTR seems to be an anomaly as far as corporations choosing to hold bitcoin as their treasury reserve, and I think I read about one other company doing that or something similar.  But I really, really don't think it's going to become a trend. 

For one thing, look at how much bitcoin MSTR bought.  Didn't I read that it was like 0.2% of the total bitcoin supply?  And that's just from one company!  There isn't enough bitcoin to go around if 500 companies wanted to start buying it.

And another thing is that it's extremely risky for any corporation to do what MSTR did, and I'm thinking about bitcoin's historic volatility alone, never mind all the other reasons I could probably come up with.

But there is also a downside to this, because it is possible that MicroStrategy may engage in large bitcoin sales to compensate for losses, which could adversely affect the price of the bitcoin.

Yeah, I think I wrote about that in one of my last posts about MSTR.  A situation might eventually come along that forces them to liquidate their entire BTC position, and that might have a really bad effect on its price, unless they arrange a private deal or something.

I'm going to keep following this, and I have MSTR on my stock watch list.  And I'd definitely agree that it's overvalued with a P/E of 68.59.  That's probably the result of the bull market that's been ongoing since around 2009 or so.

[fiulpro]

Few things about microstrategy:

https://news.bitcoin.com/nasdaq-microstrategy-bitcoin-425-million/

The company has purchased a total of 38,250 bitcoins at an aggregate purchase price of $425 million.

The company did actually made headlines on purchasing a lot of Bitcoins.

But not so fast ;

The CEO did make a nasty comment about bitcoins in 2013.
He said *#bitcoin days are numbered. It seems like just a matter of time before it suffers the same fate as online gambling.*

Then the man said : He forgot about the fact that he ever made a statement like that .
He did try to explain it but am not really interested in that.
BUT just a few hours back he did try and say how bitcoins can be a good store of value .

This is actually nothing but a company shifting it's ideals ideals when they see an opportunity in the market , they are just after the profit and does not care about the bitcoins.

They want to have an option other than the banks since we are in a pandemic and anything can happen , people can even start a war right now, we are on the brink.

Am not interested in a company like that for sure. But then again all the companies out there are like that , what can you we say ? The morals and ideals are all dependent on cash out in the market. I believe bitcoins can actually change their outlook. People are supporting them because indirectly they are supporting bitcoins.

[Febo]

It is funny their shares are lower then was in 2017. I thought we are in a stockmarket boom and all shares are close to ATH if not there. They also had huge pump in 2000 dot com bubble. Would love to hear story what happen back then, but fro sure they were a small and insignificant player back then.

[ilovealtcoins]

I think this is normal, people have also made companies increase their share prices when some companies changed their names and added Blockchain to their names in 2016-2017.
The market is manipulated by human psychology, the price increase or decrease is temporary. We still often witness such strange events.

[Upgrade00]

To view Michael Saylor's position, please click here: https://www.bloomberg.com/news/articles/2020-09-22/ceo-says-bitcoin-is-safer-after-moving-firm-s-cash-to-crypto.

I couldn't read the full article, as I got a message to subscribe to their services a couple of lines in, but from the headline they seem to want to avoid using the term Bitcoin as little as possible; replacing it with words like, "crypto" and "coin" (which makes no sense),.even though microstrategy has expressed interest in just Bitcoin:


In a recent tweet Michael Saylor also replied to articles claiming he said they would sell bitcoins at any time;

There is no truth to the stories currently circulating that speculate "he would not hesitate to dump MicroStrategy’s 38,250 Bitcoin (BTC) at a moment’s notice if an alternative asset’s yields were to jump."   This is creative journalism.

To view Michael Saylor's position one would be better of listening to his podcast interviews than the comments of mainstream media.
Edit: I scrolled really fast and was able to get the quote from the article;

“We can liquidate it any day of the week, any hour of the day,”Saylor said. “If I needed to liquidate $200 million of Bitcoin, I believe I could do it on a Saturday. If I took a haircut, I believe it would be 2%"

The word 'can' dos not suggest any desire to take an action, but means there is a possibility of it. Imo, it could be seen as a way of saying, 'Bitcoin is a liquid currency', and not that they are willing to take advantage of that liquidity anytime soon.

[el kaka22]

Around 16th of September it increased all the way to 174 dollars per share, which is probably a new high for them, it is a great deal and I would say a success for the company as well, they are working to make the company bigger and 174 was the proof of that. However we also have to realize that it is 146 dollars right now, only a week or so later. Even bitcoin doesn't go down that quickly, that was a sharp fall that shouldn't have happened.

Bitcoin didn't went down during this period, so it must be something else that made them lose money, or maybe it was a correction after such a needless hype that saw it go up, whatever the reason was, the fall was too sharp for my liking and they should probably make a statement about that as well, otherwise a great thing that they saw such high numbers at one point.

[fillippone]

Around 16th of September it increased all the way to 174 dollars per share, which is probably a new high for them,

<...>

Quite wrong. MicroStrategy all time high was back in March 2000 at 3130. Micheal Saylor already was CEO of the company at the time, already with the most voting power.
This causes a few problems with the SEC, as I explained in my other thread on that subject:

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

[jaysabi]

So, what do we have: A large company like MicroStrategy is interested in the crypto market by purchasing bitokin.

But the yields are low and the data aggregator considers MicroStrategy's stock to be overvalued, plus the inflated stock market tells us that everything could collapse soon. Wouldn't MicroStrategy become one of the catalysts of the bearish bitcoin market by starting to sell its accumulated bitcoin capital to minimize losses, thus collapsing the bitcoin market.


Source used: https://bitcoinist.com/microstrategy-stock-jumps-9-following-bitcoin-investment-red-flags-ahead/

This is an incredibly unique position here with MicroStrategy. Frist though, MicroStrategy is not by any stretch a large company.  Market cap of $1.5 billion would place it solidly in the small cap space. As for the unique factors, MicroStrategy has 5 consecutive years of falling revenues, and a leader who has past trouble with the overstating results that lead to an SEC action against Saylor that nearly wiped the company out previously.  So I would say the company falls more in the troubled category than not for these specific reasons.  On top of this, Saylor controls the entire company from top to bottom. He has so much voting power that nobody can get on the board without his approval, so there is no effective oversight from the board of directors.  And all the other stockholders put together don't have enough voting power to challenge any of his decisions. So  total lack of oversight for all practical purposes that leaves Saylor completely immune to any consequences for his corporate actions.

So to summarize, a smallish and shrinking company with no corporate oversight run by someone with a problematic past.  This confluence of unique circumstances is why this is a one off and not a sign of a bunch of major corporations about to jump into investing in bitcoin.

[Salauddin1994]

Microstrategy stocks have jumped 9% after bitcoin investments which is a good thing for them because even if companies take such steps to improve their sites they will not be able to survive much unless demand increases. Everyone is choosing bitcoin for investment if the value of bitcoin is increasing then investors not be very interested in other sites since a large amount of money has been invested the state of the market will have to be seen.

[damberg]

Well, as I expected, Microstrategy was purchased by bitcoin only to hedge their risks in the stock market and they are not particularly interested in investing and developing their crypto investments.

Michael Saylor himself confirmed that they are ready to sell all their 38,250 bitcoins at any time. I think everybody understands that it will be a big dump and bitcoin's hike to 9k minimum.

Those who were glad that Microstrategy helps bitcoin grow..... now as if it had to grieve because of them, it is now falling.

To view Michael Saylor's position, please click here: https://www.bloomberg.com/news/articles/2020-09-22/ceo-says-bitcoin-is-safer-after-moving-firm-s-cash-to-crypto.

Considering that they are ready to sell the whole pile of bought Bitcoin, it looks like a massive and risky bet by the company executives (except if they know something that we don't know yet). They are not interested in crypto industry, their purchase made a headline once or twice, but the company will probably never enrich crypto sphere with their own product or solution. 

[noorammak]

I think this is normal, people have also made companies increase their share prices when some companies changed their names and added Blockchain to their names in 2016-2017.
The market is manipulated by human psychology, the price increase or decrease is temporary. We still often witness such strange events.

I agree with your opinion. It doesn't make a lot of sense to add Bitcoin to its reserves. They just replace cash with Bitcoin. The value of the business increased unreasonably. I will not buy the stock of this company just because they add bitcoin to their reserves.

[jaysabi]

Well, as I expected, Microstrategy was purchased by bitcoin only to hedge their risks in the stock market and they are not particularly interested in investing and developing their crypto investments.

Michael Saylor himself confirmed that they are ready to sell all their 38,250 bitcoins at any time. I think everybody understands that it will be a big dump and bitcoin's hike to 9k minimum.

Those who were glad that Microstrategy helps bitcoin grow..... now as if it had to grieve because of them, it is now falling.

To view Michael Saylor's position, please click here: https://www.bloomberg.com/news/articles/2020-09-22/ceo-says-bitcoin-is-safer-after-moving-firm-s-cash-to-crypto.

Considering that they are ready to sell the whole pile of bought Bitcoin, it looks like a massive and risky bet by the company executives (except if they know something that we don't know yet). They are not interested in crypto industry, their purchase made a headline once or twice, but the company will probably never enrich crypto sphere with their own product or solution. 

Their lack of commitment to hold indefinitely is definitely worth nothing. Michael Saylor is all over pumping bitcoin now that his company owns so much of it, but he comes off as a total shill in light of how he pumps it endlessly on twitter but his statement that they'll dump the bitcoin if the bet goes south on them. If it was any crypto other than bitcoin, his name would be synonymous with all the other shills. But because it bitcoin, people are treating him like a hero around here. I'm not one to be fooled by that.