$MSTR unrealized losses, does this really matter?

[Ziskinberg]

Seeing news that Michael Saylor’s Strategy ($MSTR) is sitting on nearly $1B in unrealized losses after Bitcoin dipped below $75k.
But honestly, does this even matter if it’s unrealized and the whole plan was long-term holding anyway?

Feels like the media is framing it to look worse. Saylor has always been vocal about holding long term and, so far, he hasn’t sold his Bitcoin.

Do you think news like this is meant to create pressure or trigger panic, or they see this as non sense news?

[john_egbert]

I think the hodlers of MSTR and investors already do this exact thing to his company.

All the rest is just noise

[crwth]

This is the challenge that he will have. Now is the "walk the walk and talk the talk" type of thing for him. A lot of people have probably been waiting for this or even wishing him this type of thing, and we will see how he handles it. I think it's an excellent discount for him since he would really continue to accumulate.

What I'm thinking about is this ^{(this is my opinion)}. As long as the business doesn't get affected by their operations, it would be okay for them. It can still continue to operate and it's not tied because it's the investment by the company and by the looks of it, still going strong.

[zasad@]

Savvy investors don't put all their money into one asset, but adhere to diversification. Risky assets, such as Bitcoin, can fall in price, and this poses challenges for investment portfolio risk management.
I don't see this as a problem yet. There are more serious problems in the financial market right now.

[macson]

News like this will continue to be reported by the media to convey the narrative that Saylor is experiencing problems and that investors need to be cautious. But we know that these are unrealized losses, not real losses, just paper losses. As long as the assets are not sold, they will not become losses.

That's why when the price of bitcoin drops like it is now, Saylor actually signals to buy more bitcoin, to strengthen MicroStrategy's long-term position and lower the average cost per bitcoin.

Furthermore, Strategy's investment objective is long-term, so short-term price fluctuations are not a major issue.

[Free Market Capitalist]

But honestly, does this even matter if it’s unrealized and the whole plan was long-term holding anyway?

If the only product of the company were the common stock, MSTR, it wouldn't matter much. Last crypto winter the same thing happened, and the company weathered the storm.

The problem now is that he has issued a whole series of preferred shares that pay around 10% annual dividends, and paying 10% based on an asset that yields 0% or even has unrealized losses is a mathematical equation that does not work.

Apart from being the worst performing asset on the Nasdaq 100 last year, it looks like the fall in its share price and market cap means it will most likely be removed from the index this year.

[Fiatless]

Do you think news like this is meant to create pressure or trigger panic, or they see this as non sense news?

Anyone who bought Strategy shares should have known that Bitcoin is volatile. The bear season is setting in and they should be ready for a further price drop. Michael Saylor is not giving up on Bitcoin because there are indications that the company will keep accumulating. This news might just be a means to promote FUD. After all other companies that have not invested in Bitcoin had bigger losses during the economic downturn. Many companies such as Microsoft, Nvidia, Oracle, Tesla, etc lost experienced notable losses this period.

[arwin100]

But honestly, does this even matter if it’s unrealized and the whole plan was long-term holding anyway?

If the only product of the company were the common stock, MSTR, it wouldn't matter much. Last crypto winter the same thing happened, and the company weathered the storm.

The problem now is that he has issued a whole series of preferred shares that pay around 10% annual dividends, and paying 10% based on an asset that yields 0% or even has unrealized losses is a mathematical equation that does not work.

Apart from being the worst performing asset on the Nasdaq 100 last year, it looks like the fall in its share price and market cap means it will most likely be removed from the index this year.

Situation became so different now if we compare it on past crypto winter. Way back before MSTR is the common stock that they have, but now issuing that 10% on preferred shares really change the situation.

Paying such yield on Bitcoin, which does not generate great cashflow to their company is really hard to sustain. Also with MSTR became one of worst performer in Nasqaq 100 on previous year, the current huge drop might put their company on more bigger risk.

[fikrett]

Do you think news like this is meant to create pressure or trigger panic, or they see this as non sense news?

Anyone who bought Strategy shares should have known that Bitcoin is volatile. The bear season is setting in and they should be ready for a further price drop. Michael Saylor is not giving up on Bitcoin because there are indications that the company will keep accumulating. This news might just be a means to promote FUD. After all other companies that have not invested in Bitcoin had bigger losses during the economic downturn. Many companies such as Microsoft, Nvidia, Oracle, Tesla, etc lost experienced notable losses this period.

Or to just gather views / likes / replies.

Nothing beats the good ol' FUD posts for that goal.

[Ziskinberg]

But honestly, does this even matter if it’s unrealized and the whole plan was long-term holding anyway?

If the only product of the company were the common stock, MSTR, it wouldn't matter much. Last crypto winter the same thing happened, and the company weathered the storm.

That’s basically their way of raising money, they do have preferred shares and I think they can manage it just fine.
What’s happening right now doesn’t really affect their profitability anyway.

The problem now is that he has issued a whole series of preferred shares that pay around 10% annual dividends, and paying 10% based on an asset that yields 0% or even has unrealized losses is a mathematical equation that does not work.

Apart from being the worst performing asset on the Nasdaq 100 last year, it looks like the fall in its share price and market cap means it will most likely be removed from the index this year.

A lot of people assume MSTR’s income mainly comes from Bitcoin, which isn’t really the case. Bitcoin just sits on their balance sheet as an asset so it doesn’t generate operating cash flow. The money still comes from their core business, the software and services side.

People also mix up on Bitcoin’s price with MSTR’s valuation. They think they move on the same direction, they are related, but not the same thing.
MSTR’s stock is affected by their operation including debt which is the biggest factor.

I checked their financials and in 2024 they reported around $463M in revenue. That shows they’re still generating real income, which should help cover payments to preferred shareholders based on the dividend rates they offer.

https://www.nasdaq.com/market-activity/stocks/mstr/financials

[fikrett]

But honestly, does this even matter if it’s unrealized and the whole plan was long-term holding anyway?

If the only product of the company were the common stock, MSTR, it wouldn't matter much. Last crypto winter the same thing happened, and the company weathered the storm.

That’s basically their way of raising money, they do have preferred shares and I think they can manage it just fine.
What’s happening right now doesn’t really affect their profitability anyway.

They can only call em up and ask when the lights will become green again. Then again, I don't think it's their first time on seeing such a situation with BTC and MSTR as a whole.. Sure, it can happen - but it will be tanked just like it always was, and as you said - MSTR doesn't entirely rely on btc to stay afloat.

[Ziskinberg]

But honestly, does this even matter if it’s unrealized and the whole plan was long-term holding anyway?

If the only product of the company were the common stock, MSTR, it wouldn't matter much. Last crypto winter the same thing happened, and the company weathered the storm.

That’s basically their way of raising money, they do have preferred shares and I think they can manage it just fine.
What’s happening right now doesn’t really affect their profitability anyway.

They can only call em up and ask when the lights will become green again. Then again, I don't think it's their first time on seeing such a situation with BTC and MSTR as a whole.. Sure, it can happen - but it will be tanked just like it always was, and as you said - MSTR doesn't entirely rely on btc to stay afloat.

They actually have a very smart business model, which is why a bear market doesn’t really affect them the way people think. Most investors who buy the stock are in it for the long term anyway, so what we’re seeing now is more of a short-term phase. As we already know how markets work, prices eventually recover and the market turns bullish again.

A lot of people assume that when they sell MSTR stock, all of that money automatically goes into buying Bitcoin, but that’s not really how it works. A big portion might go toward Bitcoin, sure, but the rest is used to finance their main business operations. If you look deeper into how they actually operate, it becomes a lot easier to understand why their model holds up.

[DeeppRockk]

They can only call em up and ask when the lights will become green again. Then again, I don't think it's their first time on seeing such a situation with BTC and MSTR as a whole.. Sure, it can happen - but it will be tanked just like it always was, and as you said - MSTR doesn't entirely rely on btc to stay afloat.

look,  i've seen this movie before... back in 2017 when any company with a blockchain press release watched their stock crater 80% overnight.
the difference with MSTR is they actually hold the btc, not just hype, but the market panic is identical. i remember the first big dip after the 2021 top, everyone thought Saylor was nuts for doubling down, and then again in 2022 when we hit the 16k range.

their treasury play isn't new, and they've survived because they're not passive... they've structured debt, got that boring software business that churns out cash.

the real test isn't surviving a dip, it's convincing lenders to hand over more cash when btc is down. they pulled that off in 2023 with convertible notes, and they'll probably do it again.
so this idea they just hodl and wait for green lights?

that's retail. MSTR is actively juggling debt and playing the long game, which is why they didn't get liquidated like some leveraged crypto funds. i'm not saying it's safe, but lumping them in with the usual 'crypto company' misses the nuance of a decades-old public company figuring this out.

[Free Market Capitalist]

That’s basically their way of raising money, they do have preferred shares and I think they can manage it just fine.
What’s happening right now doesn’t really affect their profitability anyway.

You say you think so, but you don't provide any arguments to back up what you say.

A lot of people assume MSTR’s income mainly comes from Bitcoin, which isn’t really the case. Bitcoin just sits on their balance sheet as an asset so it doesn’t generate operating cash flow. The money still comes from their core business, the software and services side.

People also mix up on Bitcoin’s price with MSTR’s valuation. They think they move on the same direction, they are related, but not the same thing.
MSTR’s stock is affected by their operation including debt which is the biggest factor.

I checked their financials and in 2024 they reported around $463M in revenue. That shows they’re still generating real income, which should help cover payments to preferred shareholders based on the dividend rates they offer.

https://www.nasdaq.com/market-activity/stocks/mstr/financials

You have no idea what you're talking about. That $500 million could represent a week's worth of Strategy purchases. The main income comes from selling shares and preferred stock. Compared to what they make from that, the Software Intelligence side of the business is negligible.

[Doan9269]

Microstrategy does not see this as a losses or a threat to what they ha e been investing over time, quite alright they would have looses this much as being said, but also remember countless of times they have invested and the market is rising and they make profits without exergerating on the media, as long as they are going to keep on holding, I don't see it as losses, the falls come and go at it time, what they understand better is how to hold in times like this, so that they don't sell in loss or avoid being in a rush to release from their holding when it is not yet time to do so.

[pearlmen]

From my point of view, I think its a testament of how some people believe in bitcoin to show the small players that you are not alone. It will also be glad to see what the headline would be when he recovers the loss and made headway into profit. It might look impossible now but its definitely on the horizon.

[Dunamisx]

Why are people saying this as a blood bath, this is just a fall and on a normal expectation it is what microstrategy could have invest more at this period, also, we should not see it as a great loss because of the market fall in this manner because they are ready to continue with their holding and never sell, which we definitely prompted their advantage to make more profit at the cause of time because they are not selling now instead they are being ever ready to hold till another season and beyond.

[UserU]

Why are people saying this as a blood bath, this is just a fall and on a normal expectation it is what microstrategy could have invest more at this period, also, we should not see it as a great loss because of the market fall in this manner because they are ready to continue with their holding and never sell, which we definitely prompted their advantage to make more profit at the cause of time because they are not selling now instead they are being ever ready to hold till another season and beyond.

Without paper hands, we don't get those tasty dips.

[aoluain]

It doesn't matter and he is certainly not panicking. There is no way Microstrategy would have
been operating on the notion that the market was always going to be bullish and I'm sure he
has all their. investors brief'd on Bitcoins 4 year cycle and what to expect and that atthis time
its the .ost inopportune to sell.

[Ambatman]

Well surprising
There are people that just love to see something fail
And if it looks like its going their way they start screaming it.
The worse are people that are saying Strategy is going to be liquidated
Heads with idle brains.

Do you think news like this is meant to create pressure or trigger panic, or they see this as non sense news?

What's really affected by all this isn't Bitcoin but common stock holders of Strategy
Bitcoin is a factor not the result.