Calculating Bitcoin per share of MSTR

[Jumperman4]

I am trying to establish a baseline of how much bitcoin you buy, by buying a share of MSTR.
I have an IRA and would like to know exactly how much btc per share I am buying by buying MSTR.

I'm opting for MSTR vs GBTC because I have a gut feeling MSTR will not sell their BTC any time soon. I am not going to dump my IRA.

[1714939764]

1714939764

[Jumperman4]

I am trying to establish a baseline of how much bitcoin you buy, by buying a share of MSTR.
I have an IRA and would like to know exactly how much btc per share I am buying by buying MSTR.

I'm opting for MSTR vs GBTC because I have a gut feeling MSTR will not sell their BTC any time soon. I am not going to dump my IRA.

129,699 is the amount of BTC they own as of their previous 8-k as of June 29th, 2022. That is approximately $3 billion in market value as of today 7/28/2022.

MSTRs market cap is 3 billion, there is no way they are entirely composed of BTC, meaning that 1 share price would equal the exact amount of btc. EX: today 7/28/2022 at this as per the Nasdaq the time is 09:53 am mstr is $259 =0.011189451673665475btc.

That can't be.

I am trying to establish a baseline of how much bitcoin you buy, by buying a share of MSTR.
I have an IRA and would like to know exactly how much btc per share I am buying by buying MSTR.

I'm opting for MSTR vs GBTC because I have a gut feeling MSTR will not sell their BTC any time soon. I am not going to dump my IRA.

129,699 is the amount of BTC they own as of their previous 8-k as of June 29th, 2022. That is approximately $3 billion in market value as of today 7/28/2022.

MSTRs market cap is 3 billion, there is no way they are entirely composed of BTC, meaning that 1 share price would equal the exact amount of btc. EX: today 7/28/2022 at this as per the Nasdaq the time is 09:53 am mstr is $259 =0.011189451673665475btc.

That can't be.

its approximately 98% bitcoin?

[jackg]

I think it's a case that they're actually being bought per share for less than bitcoin at the moment. There's a few reasons for this: the main one is it looks like it's the main part of their business, their revenue is about $500mln and their profits aren't great (they're profitible too unlike most tech stocks - this may make them less attractive). There's also news of them holding leveraged longs on bitcoin (with low leverage) but holding a leveraged position is still riskier than not.

[OgNasty]

I am trying to establish a baseline of how much bitcoin you buy, by buying a share of MSTR.

There are 9.33 million MSTR shares outstanding according to Yahoo Finance. 

129,699 is the amount of BTC they own as of their previous 8-k as of June 29th, 2022.

Some napkin math (no idea how accurate this is, just going off some things I found on yahoo finance).

If there are 129,699 BTC held among 9,330,000 shares, that is 129699/9330000 or approximately 0.01390128617 BTC per share.

With a current share price of $273.70 and a Bitcoin value of $332.27 per share, you can see that they are also using debt of which they currently have 2.44B.

The debt comes to $261.52 per share.  They also have around $10 in cash per share, so we'll say there's $250 worth of debt and $330 worth of Bitcoin for every share of Microstrategy.  That means with no leverage (they are using a little) and no profit (they had profit of over $400M last year), you would expect to see the stock trading at around $80 per share.  This shows the market believes greatly that Microstrategy will continue investing in Bitcoin and that the Bitcoin price will rise.  Perhaps I'm overlooking something with my quick calculations, but it seems that GBTC gives you more BTC than you pay for, while MSTR gives you far less.  The difference being that GBTC has to sell BTC to pay management fees while MSTR buys BTC with income. 

[jackg]

With a current share price of $273.70 and a Bitcoin value of $332.27 per share, you can see that they are also using debt of which they currently have 2.44B.

The debt comes to $261.52 per share.  They also have around $10 in cash per share, so we'll say there's $250 worth of debt and $330 worth of Bitcoin for every share of Microstrategy.  That means with no leverage (they are using a little) and no profit (they had profit of over $400M last year), you would expect to see the stock trading at around $80 per share.  This shows the market believes greatly that Microstrategy will continue investing in Bitcoin and that the Bitcoin price will rise.  Perhaps I'm overlooking something with my quick calculations, but it seems that GBTC gives you more BTC than you pay for, while MSTR gives you far less.  The difference being that GBTC has to sell BTC to pay management fees while MSTR buys BTC with income. 

Most companies have debt to assets of around 70% too so that makes sense as a figure - it could be a problem if btc falls to much but given the earnings anyway it's probably not much to worry about as they have other assets/services too.

I think net income is normally used instead of gross profit to work out how much a company has made (based off gross profit, their margins look high though - as if they're quite far in profit - net income includes other things like taxes though I'm not sure of its name on US balance sheets as it might be different).

[Tytanowy Janusz]

I am trying to establish a baseline of how much bitcoin you buy, by buying a share of MSTR.
I have an IRA and would like to know exactly how much btc per share I am buying by buying MSTR.

I'm opting for MSTR vs GBTC because I have a gut feeling MSTR will not sell their BTC any time soon. I am not going to dump my IRA.

they might be forced to sell. MSTR creates little to zero annual profit compared to marketcap and debt. They are mainly getting more and more debt and buying bitcoin. Now imagine who is the buyer of this debt. Who is investing in debt that is being converted directly into bitcoin by unprofitable or hardly profitable company. In case bitcoin success its much better to invest in bitcoin rather than corporate debt with 7% interest. If bitcoin fails ... microstrategy wont be able to pay back. The only reason microstrategy is getting cheap debt and someone is buing their junk debt papers is because of TINA (there is no alternative) and corporate debt bubble - https://bitcointalk.org/index.php?topic=5344525.msg57259351#msg57259351.

But not anymore. In case FED will rise rates to ~10% (low chances but its possible, in 1980 they were forced to set rates @ 20% to fight inflation). Who will lend money at 7% to mstr. They will be forced to get it @ 20% or higher. And it wont be founds for new pruchases of bitocoin it will be a new debt to roll over current debt. At this point it will be ponzi. Its dark scenario that most likely wont happend but isn't it better to buy bitcoin by your own and avoid this risk (and many more)?

[mk4]

I get how some people think that they're buying "cheaper bitcoin" when buying sort of proxy bitcoins through the likes of MSTR and GBTC, but really — is the fact that you don't have the non-custodial aspect of bitcoin not worrying to you?

The only way I can somewhat justify such decisions is that if I can actually sort of "redeem" the BTC sometime in the future, which you could potentially have with GBTC if it ended up becoming an ETF, but definitely not with MSTR.