$MSTR unrealized losses, does this really matter?

[Victorybit1]

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.

If there is anyone who can stick up with the fall of price in Bitcoin then it has to be Micheal saylor atleast from the experience he has gotten over the years, this would be just a normal thing for him although can't say the same for the folks that investers on the shares, the reason being is because they will act different as to the development of the price of Bitcoin dipping so massively but Micheal saylor will be buying buy normal or even more seeing opportunities as the price is low so that he can purchase even more.

[serjent05]

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?

I think Michael Saylor is not new to the market and knows about this kind of stuff happening, so he has his own solution on this.  Unrealized loss does not matter until it became realized.

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?

This news is created to stimulate people's minds into imagining something, and may have a FUD effect on those who are pessimistic about the Bitcoin market.  For me, the news is not non-sense and it is for the best to reveal the possible scenario when Bitcoin price is going down.  This way, people who are into Bitcoin will plan more and have a strategy to cope up with this kind of trend.

[batang_bitcoin]

When MSTR and Saylor keeps on buying during the lows and at the tops, people love him. Now, that the unrealized losses are being published by some and then, people starts to hate him or think of how they'd do and their investors if the price goes lower. Let them be, they know and calculated everything until they become zero. So aside from the unrealized profits, people have to publish as well about the unrealized profits they've made just to be fair for both sides. But if that's the entirety of it and they have already excluded the gains they've made for the past year, that's a lot but if he's holding it, it will remain as a paper loss.

[BlackHatCoiner]

I'm just reminding the short-memory bitcoiners here that bitcoin was worth $125k about four months ago. This is something that Saylor is obviously prepared for. I've bored myself hearing him say that "volatility is vitality" or that "volatility favors those looking long-term".

Whoever bought MSTR with the expectation that it'll go up within a couple of months needs to lower his time preference and start looking at things in 4-year periods. 

[Alpha Marine]

Sometimes, the people reporting are just doing their job by reporting, while most of the time, it is just a clickable hot topic.
It's not a crazy thing for a $40 billion corporation to lose a billion. It happens all the time, but those are not interesting headlines. A 3-5% drop in the share price of a big corporation can make it lose hundreds of millions. But technically, nobody loses money unless you sell at a loss.
The same can be said about this. Your Bitcoin value might have dropped, but you haven't lost yet unless you sell for a loss, that is what it is called, "unrealised.

Why I say it's a clickable hot topic is because Michael Saylor’s Strategy is not the only person or company that saw the value of their holding drop when the price dips, but he is the one worth talking about because he is a hot topic.

[The Sceptical Chymist]

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.

I haven't been following all of the financing MSTR has been doing, but isn't there a shitload of debt on their balance sheet because of all the BTC purchases?  Even if MSTR's core business stays solid, I would think that debt might become a problem if bitcoin remains where it is right now.

However, I have a feeling that this is just a major dip and bitcoin will recover.  Everything is down at the moment (from recent highs at least), including precious metals, altcoins, and even the stock market.  The media isn't blowing this out of proportion IMO, at least no more than it sensationalizes any other story it reports.  A bitcoin drop/crash has always presented MSTR with a very risky situation, and given how much bitcoin the company has on its books....yeah, no surprise it's making news.

[m2017]

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?

The key word is "unrealized" losses. You could just as easily say that Strategy has an unrealized profit of $1000 B, since bitcoin is bound to rise in price in the future. I don't think I've ever seen a more idiotic piece of news.

At this point, Strategy does NOT have any losses.

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?

This is a clear indication that the media is manipulating opinion and should NOT be taken as a source of information, as it is 100% misinformation.

Why was this news even necessary? This tweet is meaningless, empty, and without substance, only creating panic in the eyes of inexperienced investors out of nowhere. Someone wants the market to collapse further.

Don't trust the media and do the opposite of what they say.

[Webutxo]

When MSTR and Saylor keeps on buying during the lows and at the tops, people love him. Now, that the unrealized losses are being published by some and then, people starts to hate him or think of how they'd do and their investors if the price goes lower. Let them be, they know and calculated everything until they become zero. So aside from the unrealized profits, people have to publish as well about the unrealized profits they've made just to be fair for both sides. But if that's the entirety of it and they have already excluded the gains they've made for the past year, that's a lot but if he's holding it, it will remain as a paper loss.

I think it's just natural of the market sentiment to be have that way, people loves you when things are good and leave you behind when the journey becomes tough. However, Strategy didn't start today, they have been here more than 10 years and has experience the worst dump of dumps and never runaway, they have bought billions of Bitcoin this year alone and I'm sure they are going to buy even more that is if they are not even doing that now.

My only fear about strategy is what will happen after, he said something about holding Bitcoin for 100 years which to me seems like a lie, he is not going to reach another 100 years from here and I don't know how he thinks the company will do with this Bitcoin they are buying. They are going to sell one way or the other because the billions given him as loan are not for free, there is a contract behind those money they used to buy Bitcoin which must be returned.

[Free Market Capitalist]

I'm just reminding the short-memory bitcoiners here that bitcoin was worth $125k about four months ago. This is something that Saylor is obviously prepared for. I've bored myself hearing him say that "volatility is vitality" or that "volatility favors those looking long-term".

Not really. I have studied Strategy's business model very carefully, and I can assure you that it has fundamental flaws.

The main flaw lies in the preferred shares, for which it pays a 10% annual dividend. Saylor's theory is that Bitcoin will have a CAGR of 30% over the next 20 years, and therefore he will be able to pay that 10% dividend, and the other 20% will go to revalue the common stock. MSTR.

The main reason why this does not work is that even if Bitcoin does indeed have that CAGR over the next 20 years, he is nowhere near achieving that return. The CAGR of Bitcoin since Strategy started buying, what he calls the Bitcoin Standard Era, was 40%, and he is currently achieving almost 0%.

Furthermore, that 30% annual projection assumed that in these early years the CAGR would be higher, at 40 or 50%, and at the end of the 20 years lower, at around 20%, giving an average of 30%. What we have since Saylor formulated his hypothesis is that in 2025 Bitcoin fell 7% and this year things are looking bad.

Not to mention the contradictions he has fallen into:

"Never sell your Bitcoin". Now he says he might sell.
"People who save in fiat we call them poor". Now he's built a $2,2B fiat reserve.
"I'm not going to ATM the common stock below 2,5 mNAV". Just after that he ATMs the stock down to 1 and change.

The latter, the common stock, is another problem. Not the main one, but since Saylor destroyed shareholder value with the ATM, right after saying it would not do so below 2.5 mNAV, the stock has fallen so much that the market cap is at the bottom of the Nasdaq 100, and with a couple more months like this, it will drop out of the index due to loss of market cap, with all that that implies, mainly reduced access to liquidity.

[Dictator69]

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?

The media these days is framing every little thing like a big one, they are giving bad feelings about everything. I was reading a post about Bitmine's loss, which is even bigger than the MSTR because their unrealized PNL is more than $5 billion and MSTR's loss is only $1 billion.

The media has always contributed most in the fud and maybe they are trying to create another one with their series of biased ways of sharing news.

MSTR is a big player, and they can easily handle this unrealized loss and there is nothing to worry about them, we should worry about ourselves.

[nemesis_incarnate]

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?

The media these days is framing every little thing like a big one, they are giving bad feelings about everything. I was reading a post about Bitmine's loss, which is even bigger than the MSTR because their unrealized PNL is more than $5 billion and MSTR's loss is only $1 billion.

The media has always contributed most in the fud and maybe they are trying to create another one with their series of biased ways of sharing news.

MSTR is a big player, and they can easily handle this unrealized loss and there is nothing to worry about them, we should worry about ourselves.

Yep. News are created nowadays (in 90%) to just spread the agenda or turn people's heads around some topic..

[sokani]

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?

It is the same media that lauded him for stacking bitcoin when Bitcoin hit an ATH. Now, they've changed their tone and are throwing shades at him. Sadly, that's how life is. The way I see it, Saylor is not at a loss because he's holding long-term. When the market eventually turns bull again, the value of his holding will also increase.

[fikrett]

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?

It is the same media that lauded him for stacking bitcoin when Bitcoin hit an ATH. Now, they've changed their tone and are throwing shades at him. Sadly, that's how life is. The way I see it, Saylor is not at a loss because he's holding long-term. When the market eventually turns bull again, the value of his holding will also increase.

And there will be less investors shouting at him as why the MSTR is not gaining all the time vs what they want to see

[BlackHatCoiner]

The main reason why this does not work is that even if Bitcoin does indeed have that CAGR over the next 20 years, he is nowhere near achieving that return. The CAGR of Bitcoin since Strategy started buying, what he calls the Bitcoin Standard Era, was 40%, and he is currently achieving almost 0%.

I agree with all your points, but in this one, something doesn't add up to my mind. First things first, isn't that mixing different concepts? Why should MSTR have a CAGR of 20% if bitcoin compounds annually by 30%? And even if bitcoin compounds annually by 30% or 40%, Strategy's realized outcome depends on a variety of things.

I just checked their Bitcoin Purchases. Bitcoin may have compounded by 40% since he started buying, but their average BTC cost is $76k. Doesn't that justify why he's currently achieving 0%?

[hero_the_bossman]

The main reason why this does not work is that even if Bitcoin does indeed have that CAGR over the next 20 years, he is nowhere near achieving that return. The CAGR of Bitcoin since Strategy started buying, what he calls the Bitcoin Standard Era, was 40%, and he is currently achieving almost 0%.

I agree with all your points, but in this one, something doesn't add up to my mind. First things first, isn't that mixing different concepts? Why should MSTR have a CAGR of 20% if bitcoin compounds annually by 30%? And even if bitcoin compounds annually by 30% or 40%, Strategy's realized outcome depends on a variety of things.

I just checked their Bitcoin Purchases. Bitcoin may have compounded by 40% since he started buying, but their average BTC cost is $76k. Doesn't that justify why he's currently achieving 0%?

I think the confusion comes from mixing up Time-Weighted Return (CAGR) with Money-Weighted Return (IRR).

Bitcoin as "the asset" has a CAGR of 40% because it treats every year equally, as far as I understand it..

But Saylor’s money is heavily weighted toward 2025/2026!

Since 70% of his capital was deployed in the last 18 months at prices that are high enough, his personal return tracks the recent choppy market, not the usual bull run.

[Free Market Capitalist]

I agree with all your points, but in this one, something doesn't add up to my mind. First things first, isn't that mixing different concepts? Why should MSTR have a CAGR of 20% if bitcoin compounds annually by 30%?

Saylor said Bitcoin is going to achieve a 30% CAGR in the next 20 years. It would be 50% in the first few years and would gradually decrease to 20% in the 20th year, giving an average of 30%. That's what he says.

And even if bitcoin compounds annually by 30% or 40%, Strategy's realized outcome depends on a variety of things.

I just checked their Bitcoin Purchases. Bitcoin may have compounded by 40% since he started buying, but their average BTC cost is $76k. Doesn't that justify why he's currently achieving 0%?

Yes, that's precisely my point. That he is achieving a much lower CAGR with his Bitcoin purchases because he does what I call a reverse DCA. He buys a lot when the price of Bitcoin sckyrockets and little or nothing when it falls. That's why he is only achieved a 0% CAGR to current date.

[Ziskinberg]

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.

Okay, let’s look at the numbers.
Total preferred shares are around 25.5 million with a $100 face value, so roughly $2.55B.
Even assuming a high 10% dividend, that’s about $255M per year in preferred payouts.

Their core software business still generates operating cash flow, and these preferreds were structured with that kind of obligation in mind. As long as they’re not forced to sell BTC to meet payments, the unrealized losses don’t really matter.

It only becomes a real issue if cash flow dries up or selling BTC becomes necessary, which isn’t the case right now.

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.

You’re mixing two different things. Capital raises and operating income aren’t the same.
Yes, they raise large amounts by issuing shares and preferred stock, that’s how they scale BTC exposure. But that doesn’t mean the software business is irrelevant to cash obligations.

The software side isn’t there to fund BTC purchases, it’s there to support operations and recurring obligations like preferred dividends. Those purchases you’re talking about are discretionary, dividends aren’t.

So again, unrealized losses only matter if they affect cash flow or force BTC selling. Big capital raises don’t change that point.

[harapan]

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?

People panicking are not investors but traders. Not even the big firms learning from Michael Saylor are criticising him.

They're just bunch of noise makers. The media feeds of such panic and drama every body should know this by now. Tbry are not meant to do that, but these ill-informed journalist are reporting bullshit. When Bitcoin moons up, the narrative will never be in favour of those who backed out.

[MusaPk]

People panicking are not investors but traders. Not even the big firms learning from Michael Saylor are criticising him.

They're just bunch of noise makers. The media feeds of such panic and drama every body should know this by now. Tbry are not meant to do that, but these ill-informed journalist are reporting bullshit. When Bitcoin moons up, the narrative will never be in favour of those who backed out.

If you are investing in Bitcoin then be ready to see it going down to extraordinary levels otherwise just away from it. Bitcoin is profitable only in the long run and if you are determined to hold Bitcoin for long run then you will see such downfalls very common. Since the launch, Bitcoin price has gone up from zero usd to $126,000 in roughly 17 years. Micheal Saylor strong stance during current dip is an indication that he firmly believe that Bitcoin will go to new ATH in coming days. Easier said than done, everyone says that Bitcoin will grow but not everyone has the courage to bear the dips.
 

[Aanuoluwatofunmi]

Maybe we can look more further into this, if it could actually be some losses at the long term, because they are more likely to continue holding, they aren't selling for now, this is their strategy and when the market falls like this, they had better maintain holding and avoid selling till the market pumps, which there has been more indication for the market rise and we don't know if the support for this is going to be more stronger than the resistance to the market rise this month.