MicroStrategy Buys Another 1,045 bitcoins for $29.3m

[serjent05]

How does it make you feel that the company that is not doing very in terms of operating profitability is further increasing its exposure to Bitcoin, and now sits at 140,000 bitcoins. I'm a little uncortable with a thought that if things go further south for them, they might be forced to dump it all on the market.

Seeing company keep on stockpiling Bitcoin makes me feel secure of the future price of Bitcoin.  For me, this means the company even though not performing well in their operations believe that Bitcoin will make them recover their losses and even give them profit in the long term.  This means if we go with the flow of buying Bitcoin today, there is a huge possibility that Bitcoin will give us huge profits in the future.

I do not think that the company will dump its bitcoin prematurely.  Before they do this acquisition I am sure they have enough fund for their operation until the next ATH of BTC (where they probably dump part of their holdings).

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[goaldigger]

So far they are still not in profit due to the fluctuations of Bitcoin but eventually when the market recovers, for sure they will have more profit in the future. Its scary though how they become more dominant in this market, imaging having that huge holdings can totally affect the price of Bitcoin and cryptomarket itself, they are slowly increasing their exposure which can be a big threat in the future.

[mk4]

Microstrategy has become a way for funds to get exposure to Bitcoin without having to hold it themselves, declare that they’re holding Bitcoin, or create new divisions of their company to handle crypto. They just have to add Microstrategy to their portfolios, and they are. I wonder if a spot ETF would have the major holders sell and buy the ETF instead.

I'm sure some people and smaller entities are holding MSTR as a proxy for bitcoin, but I don't think it would be smart for a company as gigantic as Apple to do so. Unless they buy enough shares to have a good amount of control over MicroStrategy, it adds a lot of unnecessary risk and complications simply because MicroStrategy is still a company with products and not solely a bitcoin-holdings company.

[justdimin]

How does it make you feel that the company that is not doing very in terms of operating profitability is further increasing its exposure to Bitcoin, and now sits at 140,000 bitcoins. I'm a little uncortable with a thought that if things go further south for them, they might be forced to dump it all on the market.

I do not think that it would be a bad idea for a company to run as long as they have reasonable debt. That's how companies grow and that should be something that we ended up doing as well as we can to grow as well.

Debt and losses are not as big of a deal as you might imagine, they are just doing something that would make it even more profitable, you make 1 then debt2, and start making 3, debt is over? get 5 debt and start making 10, that is how they grow. Amazon had debt and made a loss up until like maybe 10 years ago and that means they were able to grow bigger than people expected and that's how it should be done. I know people are not going to be super excited to see their favorite crypto company losing money but it's fine.

[pawel7777]

Seeing company keep on stockpiling Bitcoin makes me feel secure of the future price of Bitcoin.  For me, this means the company even though not performing well in their operations believe that Bitcoin will make them recover their losses and even give them profit in the long term.  This means if we go with the flow of buying Bitcoin today, there is a huge possibility that Bitcoin will give us huge profits in the future.

I do not think that the company will dump its bitcoin prematurely.  Before they do this acquisition I am sure they have enough fund for their operation until the next ATH of BTC (where they probably dump part of their holdings).

Nope, currently their net book value is negative. It doesn't look like they bought bitcoins with the excess cash, but rather went into debt to buy it. Unless they're able to turn things around quickly, looks like their only bet is on BTC going up in the near future.


What's more, if nothing changes, this means they will likely be dumping large amounts whether BTC goes up or down:
- if it goes down, they will be facing liquidity problems and will be forced to sell.
- if it goes up, shareholders will want to realise their profits at what they'd consider a top, rather than seeing their long-awaited gains being eaten up by unprofitable operations or risking going through another dump.

So what actually makes you feel secure here?

[buwaytress]

Nope, currently their net book value is negative. It doesn't look like they bought bitcoins with the excess cash, but rather went into debt to buy it. Unless they're able to turn things around quickly, looks like their only bet is on BTC going up in the near future.

What's more, if nothing changes, this means they will likely be dumping large amounts whether BTC goes up or down:
- if it goes down, they will be facing liquidity problems and will be forced to sell.
- if it goes up, shareholders will want to realise their profits at what they'd consider a top, rather than seeing their long-awaited gains being eaten up by unprofitable operations or risking going through another dump.

So what actually makes you feel secure here?

Yeah, this whole thing doesn't sit well with me -- I was actually pretty chuffed at the initial MS news before, not that I follow much or care much for institutionals, but the move itself, and then Saylor's interviews after, made me think he was pretty damned progressive.

But what happened last year and now this, feels like he's regressing more into gambler mentality more than anything else. Hard to see how they had excess cash in the first place, especially if he had to survive sub-20k levels. Getting into debt then actually would have settled nerves but now when there's still uncertainty in whether the economy's done purging?

[dragonvslinux]

Seeing company keep on stockpiling Bitcoin makes me feel secure of the future price of Bitcoin.  For me, this means the company even though not performing well in their operations believe that Bitcoin will make them recover their losses and even give them profit in the long term.  This means if we go with the flow of buying Bitcoin today, there is a huge possibility that Bitcoin will give us huge profits in the future.

I do not think that the company will dump its bitcoin prematurely.  Before they do this acquisition I am sure they have enough fund for their operation until the next ATH of BTC (where they probably dump part of their holdings).

Nope, currently their net book value is negative. It doesn't look like they bought bitcoins with the excess cash, but rather went into debt to buy it. Unless they're able to turn things around quickly, looks like their only bet is on BTC going up in the near future.

Worth noting they paid off their Silvergate loan last month from back in March last year:

The loan payoff was made last Friday and totaled $161 million. As part of the satisfaction of the loan, 34,619 bitcoins held as collateral were returned to MicroStrategy's custody. The company took out the loan last March.

They also bought another chunk of coin last month after that:

In addition, MicroStrategy said it purchased another 6,455 bitcoins for roughly $150 million (about $23,238 per coin) over the past five weeks.

Source: https://www.coindesk.com/business/2023/03/27/microstrategy-pays-off-silvergate-loan-buys-more-bitcoin/


So actually their most recent purchase of 1,045 bitcoins is actually much less than last month for reference sake, or their previous leveraged loan it seems.

Their earnings have been down since 2020 I noticed though, so does raise questions as to where they are getting the cash from...

[savetheFORUM]

So far they are still not in profit due to the fluctuations of Bitcoin but eventually when the market recovers, for sure they will have more profit in the future. Its scary though how they become more dominant in this market, imaging having that huge holdings can totally affect the price of Bitcoin and cryptomarket itself, they are slowly increasing their exposure which can be a big threat in the future.

They already have BTC's before and that have dumped as well but that doesn't stop them for buying again even if BTC lately is rising. People must learn from them. They are not scared even if there is a big amount involved but average people who can only risk tiny amounts are shaking when their investment goes down. They are only planning to sell at a loss. This is a wrong initiative. There are still lots big investors out there so don't worry because MicroStrategy can't dominate this market. BTC are still safe from manipulations.

For now, we must only appreciate the actions that they are making because this helps push the price outside the $30k mark

[adaseb]

So he is finally back at break even. Very crazy how he started out with a good dollar average and then by buying high he put himself in a huge bad bag holding position for over a year. Very glade that he wasnt margin called below $20K like many said he would.

Now we just need to make sure he doesn’t start dumping. Due to the state of the economy he might be forced by his shareholders or management to lighten his load and scale out. If we see that during his earnings report then I’ll cause a sell off obviously.

[Wind_FURY]

So he is finally back at break even. Very crazy how he started out with a good dollar average and then by buying high he put himself in a huge bad bag holding position for over a year. Very glade that he wasnt margin called below $20K like many said he would.

Now we just need to make sure he doesn’t start dumping. Due to the state of the economy he might be forced by his shareholders or management to lighten his load and scale out. If we see that during his earnings report then I’ll cause a sell off obviously.

He will never sell! Chad Saylor's Bitcoin "gamble", if Bitcoin surges to six digits/near seven digits, will probably be written in history books as one of the greatest investment decisions of all time, possibly comparable to those great investing barons of the past like when Cornelius Vanderbilt bought most of the rail road companies when they were in a DIP.

[dezoel]

currently their net book value is negative. It doesn't look like they bought bitcoins with the excess cash, but rather went into debt to buy it. Unless they're able to turn things around quickly, looks like their only bet is on BTC going up in the near future.


What's more, if nothing changes, this means they will likely be dumping large amounts whether BTC goes up or down:
- if it goes down, they will be facing liquidity problems and will be forced to sell.
- if it goes up, shareholders will want to realise their profits at what they'd consider a top, rather than seeing their long-awaited gains being eaten up by unprofitable operations or risking going through another dump.

So what actually makes you feel secure here?

Do not be worried, companies usually run by negative book and they do not end up with profit until very late, and this is the type of company that could never do that because all their money goes to crypto. But remember, this is the same company that owns tens of thousands of bitcoin, so one good breakout price increase on bitcoin and they would be in big profit as well.

So, they are handling things like it is right now, and even without selling any of their crypto, as long as the price goes up that would mean they are in profit, and they don't need to sell it. They just keep holding and it "looks" like they are in the negative, but the company is doing fine and should not be an issue at this moment. Maybe later if it grows bigger.

[pawel7777]

Worth noting they paid off their Silvergate loan last month from back in March last year:

The loan payoff was made last Friday and totaled $161 million. As part of the satisfaction of the loan, 34,619 bitcoins held as collateral were returned to MicroStrategy's custody. The company took out the loan last March.

They also bought another chunk of coin last month after that:

In addition, MicroStrategy said it purchased another 6,455 bitcoins for roughly $150 million (about $23,238 per coin) over the past five weeks.

Source: https://www.coindesk.com/business/2023/03/27/microstrategy-pays-off-silvergate-loan-buys-more-bitcoin/

That $161m loan was less than 6% of their total liabilities at 31/12/2022 and from the Balance Sheet perspective, this doesn't make much difference. They have $161m less liabilities now, but, if they repaid with cash, they also have $161m less assets.
And what did they buy the next batches of bitcoins with? I'm guessing they took another loan(s).

Their earnings have been down since 2020 I noticed though, so does raise questions as to where they are getting the cash from...

I'd be guessing that they keep borrowing. Repaying one loan and drawdown another.
But that's the point, it looks like they're ready to bet it all on Bitcoin and neglect the core of the business. The question is to what end? Even if things go their way, will they not dump at the next ath? Will they be holding forever only realising modest amounts? I doubt most shareholders would be happy with that.

[jrrsparkles]

As in topic's subject: MicroStrategy Buys Another 1,045 bitcoins for $29.3m:

https://www.coindesk.com/business/2023/04/05/microstrategy-buys-another-1045-bitcoin-for-239m/

^ in the article there's a typo, they've spent $29.3m not $23.9m.

https://twitter.com/saylor/status/1643586872839471105?t=L7IzW6T8ltWlRp-9pB3Oow&s=19

How does it make you feel that the company that is not doing very in terms of operating profitability is further increasing its exposure to Bitcoin, and now sits at 140,000 bitcoins. I'm a little uncortable with a thought that if things go further south for them, they might be forced to dump it all on the market.

I am watching lot of memes about this move especially on Reddit because once Michael Slayer said bitcoin is gamble so don't invest now their company itself in the process of accumulating more bitcoins so what can we expect from the haters of cryptocurrency about this.

This news also contributed towards the pushing further price of bitcoin and who knows we are at the beginning of the new bull run so if the history repeats again 30K is just nothing compared to its previous stats in percentage we can expect $150K or even 200K per bitcoin as the new ATH in my opinion.

[pawel7777]

I am watching lot of memes about this move especially on Reddit because once Michael Slayer said bitcoin is gamble so don't invest now their company itself in the process of accumulating more bitcoins so what can we expect from the haters of cryptocurrency about this.

With the price in the 30k range, Microstrategy is officially in the profit on their Bitcoin holdings, so I'm not sure if there are many memes from "haters" at the moment, as the timing is not the best for that.

But not every critique of Saylor's actions is "hate on crypto", there are some valid concerns coming from the bitcoin/crypto community.
Having one entity holding massive amount of bitcoins is never desired, especially when that entity is making losses on their core operations and is likely funding its bitcoin purchases with loans.

This news also contributed towards the pushing further price of bitcoin and who knows we are at the beginning of the new bull run so if the history repeats again 30K is just nothing compared to its previous stats in percentage we can expect $150K or even 200K per bitcoin as the new ATH in my opinion.

The purchase itself surely may have some positive effect on the price, but the news is not seen by many as particularly bullish, as mentioned above.

[Wind_FURY]

Microstrategy has become a way for funds to get exposure to Bitcoin without having to hold it themselves, declare that they’re holding Bitcoin, or create new divisions of their company to handle crypto. They just have to add Microstrategy to their portfolios, and they are. I wonder if a spot ETF would have the major holders sell and buy the ETF instead.

I'm sure some people and smaller entities are holding MSTR as a proxy for bitcoin, but I don't think it would be smart for a company as gigantic as Apple to do so. Unless they buy enough shares to have a good amount of control over MicroStrategy, it adds a lot of unnecessary risk and complications simply because MicroStrategy is still a company with products and not solely a bitcoin-holdings company.

You're right, because truly HODLing Bitcoin in their treasuries and actually believing in Bitcoin's ethos like Chad Saylor requires a small amount of insanity.

 

Although, Apple did include the Bitcoin white-paper hidden in every copy of macOS since 2018.

[Gianluca95]

As in topic's subject: MicroStrategy Buys Another 1,045 bitcoins for $29.3m:

https://www.coindesk.com/business/2023/04/05/microstrategy-buys-another-1045-bitcoin-for-239m/

^ in the article there's a typo, they've spent $29.3m not $23.9m.

https://twitter.com/saylor/status/1643586872839471105?t=L7IzW6T8ltWlRp-9pB3Oow&s=19

How does it make you feel that the company that is not doing very in terms of operating profitability is further increasing its exposure to Bitcoin, and now sits at 140,000 bitcoins. I'm a little uncortable with a thought that if things go further south for them, they might be forced to dump it all on the market.

I really hope that their strategy will be cool on the long terms. Image what will happen to them if Bitcoin (for any kind of reason) will drop to 5k dollars (for example). It is a really high-risk bet, and I don't understand why

they are only focused on Bitcoin instead to put also an eye on other project like Ethereum that is expected to be more profitable than Bitcoin.

[yhiaali3]

I believe that Microstrategy is the only company that has proven its deep belief in Bitcoin. It can be said that most of those who claimed to believe in Bitcoin got rid of it at some point, while Microstrategy has withstood despite all the strong decline that occurred and the serious problems it faced.

So the company is currently in a very good position and I'm confident they are moving forward with a great team who believe in Bitcoin and really know what they're doing. The future belongs to such companies that are determined to succeed in spite of everything.

[tygeade]

I believe that Microstrategy is the only company that has proven its deep belief in Bitcoin. It can be said that most of those who claimed to believe in Bitcoin got rid of it at some point, while Microstrategy has withstood despite all the strong decline that occurred and the serious problems it faced.

So the company is currently in a very good position and I'm confident they are moving forward with a great team who believe in Bitcoin and really know what they're doing. The future belongs to such companies that are determined to succeed in spite of everything.

To be fair there are tens of thousand of companies that bought bitcoin in the world, so they are not the only one. But given the sheer amount of bitcoin they bought, I am pretty sure that even though I do not have a concrete proof of it, I am sure that they are the one with most bitcoins on their accounts.

If there is another company that has over 100k+ bitcoins and we are not aware of it (aside from exchanges who hold our coins for us) then it would be a shocking news, usually those type of things are heard even before it happens, and certainly discussed a lot after it happens. So microstrategy may not be the only one, but it is certainly the biggest and richest one that has ever done something like this so far, many to follow hopefully.

[STT]

This is not the company I would state is the greatest backer or believer, it has to be users who rate first.   Imagine the yield they could get using all this BTC in a casino setup.  Seems a shame not to actually use it in any way and is the idea of MS is to just store it for plain appreciation.  I got a feeling the yield and usage could be the more profitable avenue, I know BTC does go up alot but why not do both things in some way.  They could be guarantor without ever letting them go, people write contracts on shares and all kinds of assets with the trade only taking place at a certain condition being passed and before that you receive a premium its a bit like insurance policies most are never used.  

On December 22, 2022, MicroStrategy sold 704 BTC, which represented their first time selling any bitcoin, for an amount of around $11.8 million.[39]

[pawel7777]

I really hope that their strategy will be cool on the long terms. Image what will happen to them if Bitcoin (for any kind of reason) will drop to 5k dollars (for example). It is a really high-risk bet, and I don't understand why

If you're convinced that Bitcoin is here to stay and that it'll keep outperforming other assets, then it makes sense to convert any spare cash into bitcoins. The problem starts when you buy bitcoins with borrowed money and when you're making losses on your principal business operations.
I don't know the exact number, but I think Microstrategy would be forced to sell long before bitcoin would hit as low as $5k.

...

On December 22, 2022, MicroStrategy sold 704 BTC, which represented their first time selling any bitcoin, for an amount of around $11.8 million.[39]

Apparently, they only sold that to get some tax benefit and bought another 810 btc two days later.