$MSTR unrealized losses, does this really matter?

[ZAINmalik75]

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?

Actually, they are the ones taking loans on their profits and they are doing it again and again and that's why competitors are worried  about their portoflio that, what if they plan to sell their bitcoins once the price goes down more. But MSTR has already said they won't lose anything and are confident that even if bitcoin hits $25k, they can cover the debt and can still have some bitcoins.

Media is always trying to spread information in the most fud creating way that anyone reading the title alone will be convinced that it is time or time has come  This news should be taken lightly, nothing is so serious.

[snowpega]

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.

You mentioned a line in bold text, "walk the walk and talk the talk." What does it mean? Can you elaborate on it to me in a simple way? Other than this, I personally believe that the market was manipulated and all that we are facing in the bitcoin market was a part of a play to trap traders, pray those holders that were in the market from the low point. And the plan was that to bring the market down so that big hands can be able to buy and accumulate more heavily and make more money.

We just noticed that once Bitcoin made its bottom at 61k, the market started to pump back and reached 70k price tag in a short time frame, and that feels like a quick pump and dump (manipulation). A lot of money from traders' accounts was liquidated in that dump, where those who might have opened short trades will be in massive profits. And no doubt the market is too smart, it will get that money back in the form of some trap. What do you think about it?

[crwth]

You mentioned a line in bold text, "walk the walk and talk the talk." What does it mean? Can you elaborate on it to me in a simple way?

Since he was really advocating BTC, he shouldn't be selling any BTC and sticking by his words and beliefs. That's just what I'm trying to say. 

[ContentWriter]

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.

I agree with you, but then you can't really call a Bitcoin maximalist a savvy investors. Their eyes are only on Bitcoin and they float or sink with it. For Saylor, as long as he can continue convincing Strategy investors that putting funds in Bitcoin is a long-term assured profit, I don't see any issues coming up, but if Bitcoin drops further to say $30k and hovers around that value for many months, I see him getting hassled. It's human nature to want result as fast as possible.

[bubilas]

The riskiness of Michael Saylor's Bitcoin strategy has long been recognized. Now, in fact, it can be confidently stated that aggressive buying above 100K caused more harm to the market. Retail quickly ran out of money and appetite amid the rise of MAG7. Essentially, CZ continued selling Bitcoin to Saylor after 2022, simply through more complex schemes, and that's a FACT.
The strategy bought 122,750 BTC at $100,000 and above for $13.22 billion at the very highs in an attempt to break through key levels.
This was successful in approximately 65% ​​of cases. It had a very short-term effect. In a short period, Saylor both made good money on arbitrage and successfully unloaded his shares.
And this only increased volatility.
Six months ago, the pattern played out again: Saylor announced a purchase of BTC, and the price began to fall.  Then he stopped announcing. And buying. It didn't help. It continued to fall...
And now BTC is already below the average purchase of 76K. MSTR has fallen slightly from $400 to $100 in five months.

Their token's price rose by 25 percent, but it's still certainly not $400. Saylor could have sold all or part of his Bitcoins at $125,000, but he decided against it. He probably knew he'd crash the price and lose his ideological public persona. But I believe in Saylor, because Bitcoin always reaches new highs, and next time will be no exception. The main thing is that the price doesn't fall too low, so that Strategy can regularly service its debts.
Like the entire crypto community, I want a figure like Saylor, who reveals the true nature of a committed person, not just in words, but by publicly demonstrating his strategy. That's why his campaign is named that way.

[Free Market Capitalist]

So yeah… the guys are doing fine for now. Probably not the ones to worry about - unlike some other “Bitcoin treasury” companies out there. Looking at you, Metaplanet.

That's right. I've talked about this in other threads on the same topic. Strategy, despite being bullish on Bitcoin, has structured its obligations in such a way that it can easily weather a crypto winter like the one we seem to be facing.

But I don't think Metaplanet is at the top of the list. There are almost 200 of them, all failing or stagnant businesses that saw Bitcoin's treasury model as a way out.

The problem that may arise is the questioning of the business model. If a significant number of these companies end up selling their bitcoin or going bankrupt, and if we don't have a Bitcoin ATH until after the next halving, I think the model will be called into question.

For Strategy specifically, I think the product most at risk is STRC. All preferreds offered by Strategy are based on mathematical fiction; they are clearly junk preferreds. However, in the case of STRC, as Saylor continues to raise the dividend despite the declining profitability of the underlying asset, which is even negative, it is clearly the most junk of them all.

For now, they can pay the dividends because they created a cash reserve by selling MSTR and diluting shareholders, further proof that the underlying thesis does not work. However, in a hypothetical scenario where several Bitcoin Treasury Companies begin to fail and we have a couple of years of winter, I believe that the preferreds model will also be proven to be a failure.

[The Sceptical Chymist]

That's right. I've talked about this in other threads on the same topic. Strategy, despite being bullish on Bitcoin, has structured its obligations in such a way that it can easily weather a crypto winter like the one we seem to be facing.

I have as well, though admittedly I learned about companies adopting crypto treasuries fairly late.  

Just looked at a couple that I've been watching, and Semler Scientific appears to have wiped any mention of bitcoin or any kind of crypto from their website (if anyone can find it, I'll admit I was wrong).  Less than a year ago, Bitcoin Magazine wrote an article about them and how they used bitcoin to pump up their stock price--which is my own synopsis of that article; feel free to disagree.  Interestingly, I don't think they're even a publicly-traded company anymore, since SMLR is no longer a valid ticker symbol and there's no investor section on their website.

Then there's Nakamoto, formerly Kindly MD....oh, wait.  I guess KindlyMD still exists but Nakamoto is some sort of separate something or other.  In any case, they sure do offer a lot of fucking narcotics for having an online medical practice model that really looks like it's now secondary to its bitcoin bandwagoneering.



The last one I've been following is LITS, or Lite Strategy (formerly MEI Pharma, Inc., a clinical-stage drug developer focusing on cancer treatments).   Gotta love this statement on their "About" page.  It's made me slap my forehead so hard that I am compelled to post a screenshot here:



We are not just another treasury company.  Never mind that our business model told cancer research to fuck itself because they

accumulate pure LTC through active treasury management and concentrate holdings per share as the ultimate metric of shareholder value. Every decision we make is measured by one thing: increasing LTC exposure for our shareholders.

The company has 4 full-time employees.  If anyone can show me that they're still performing anything resembling drug development, please do.

Also, the above quote is some of the worst corporate-financial doublespeak I have ever heard.  Did it perhaps come from their Chief People Officer?



All of this is pure insanity, worse than the world of 2015-20 not being able to come to a consensus on how many genders exist (excluding rare exceptions), expecting cotton face masks to stop viral spread, and on and on.  Can I please get a wakeup call when everything gets back to normal and Arkham Asylum escapees aren't running the world?  Thank you.

[Alex077]

  Last week Michael Saylor kept sticking to his dollar-cost averaging strategy, even while Bitcoin dropped to its lowest levels since 2024 and the losses piled up fast. He said the company bought another 1,142 BTC at an average price of $78,815. That brings their total holdings to 714,644 BTC, now worth over $49 billion.
 https://x.com/saylor/status/2020846107685695931
 In the report released last week, the company also said operating losses jumped to more than $17.4 billion as Bitcoin’s price pulled back hard. Net losses came in at $12.4 billion, and that trend could continue if BTC stays in a downtrend for a while.
 On top of that, Strategy is still diluting shareholders by issuing common stock to keep buying more Bitcoin, which obviously not everyone is happy about.

 https://crypto.news/michael-saylors-strategy-buys-1142-bitcoin/
 That said, Wall Street analysts are starting to sound more optimistic about Strategy’s stock again, mostly betting on a Bitcoin recovery. A Cantor Fitzgerald analyst kept a “buy” rating with a $192 price target. BTIG is looking at $250, while Canaccord Genuity, Mizuho, and Truist Financial see potential targets around $185, $403, and $268 respectively. According to MarketBeat data, the average Wall Street consensus target sits around $347 - roughly 176% above current levels.

But as always with Saylor, everything pretty much comes down to whether Bitcoin manages to recover.

[Cookdata]

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?

I grew up in crypto understanding that if there is no FUD, many people will go home hungry and it's going tk be dir a very long period of time. Why should strategy reserve be your problem when your priority is your Bitcoin. Let's not allow the media make it looks like Saylor wasn't prepared for days like this, he has been in this game for long period of time to understand that the market is unpredictable. It's because we pay attention to this media's they keep pushing foolish articles.

Saylor has said it many times and has debunk it that even if Bitcoin price goes to zero, they will continue to buy, the loan has long term contract and it's not due soon. If eventually the interest are due, they will come with a new a term interest and all this is because they have long term conviction for Bitcoin. I may not trust Micheal Saylor or read through his minds to know his intentions but I can see his wallet and activities, there is no sign that he is going to jeet the market.

[Free Market Capitalist]

Then there's Nakamoto, formerly Kindly MD....oh, wait.  I guess KindlyMD still exists but Nakamoto is some sort of separate something or other.  In any case, they sure do offer a lot of fucking narcotics for having an online medical practice model that really looks like it's now secondary to its bitcoin bandwagoneering.

I don't know the business model, but I do believe the stock (Kindly MD Inc. NASDAQ: NAKA)is the worst performing of all Bitcoin Treasury Companies. When they announced the company's shift to Bitcoin treasury, there was a lot of hype and the stock reached $25 whereas today it is currently trading at $0.30.

Basically, anyone who invested $25,000 in June last year now has $300, lol.

[Dogedegen]

I grew up in crypto understanding that if there is no FUD, many people will go home hungry and it's going tk be dir a very long period of time. Why should strategy reserve be your problem when your priority is your Bitcoin. Let's not allow the media make it looks like Saylor wasn't prepared for days like this, he has been in this game for long period of time to understand that the market is unpredictable. It's because we pay attention to this media's they keep pushing foolish articles.

I have talked about this with another user, and while Saylor does not have good experience in some relevant areas like all of us don't he has surrounded himself with very smart people and that is why they have been successful with their goals. I am a bit sad that people fall for media scams and FUD like this because what is happening now is expected to happen. They have proclaimed far and wide that they will always buy the top, and the natural consequence of this is that sometimes they will have to be underwater. During a bear market they will have to be underwater a lot. This is not risky, this is what is expected to happen!

Saylor has said it many times and has debunk it that even if Bitcoin price goes to zero, they will continue to buy, the loan has long term contract and it's not due soon. If eventually the interest are due, they will come with a new a term interest and all this is because they have long term conviction for Bitcoin. I may not trust Micheal Saylor or read through his minds to know his intentions but I can see his wallet and activities, there is no sign that he is going to jeet the market.

How far their position is underwater creates very little risk to Strategy. Only in some extreme cases where Bitcoin falls like 90 to 99 percent of its ATH would it be a big issue, but in that case Bitcoin has bigger problems than Strategy. People need to get some knowledge about these things and think about their priorities in life. If one is easily swayed by basic FUD this way, that does not sound good.

I don't know the business model, but I do believe the stock (Kindly MD Inc. NASDAQ: NAKA)is the worst performing of all Bitcoin Treasury Companies. When they announced the company's shift to Bitcoin treasury, there was a lot of hype and the stock reached $25 whereas today it is currently trading at $0.30.

Basically, anyone who invested $25,000 in June last year now has $300, lol.

And they say that Bitcoin or shitcoins are risky lol. The same stuff happens in the stock market also just that it does not get so much exposure. I have not even seen this anywhere in the news before I read your post. Still some people anticipated that many entities will try to abuse the narrative of Bitcoin treasury which was very hyped at that time to drain investors out of money like these guys have.

[Kocret02]

honestly i dont think it matters much as long as they have the cash flow to service their debt. unrealized losses are just numbers on paper until you actually sell and we all know saylor isnt selling a single sat. as long as bitcoin goes up in the long run this strategy is going to pay off big time. the market always freaks out over volatility but people who get the game know this is a long term play.

[Hamza2424]

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?

That was old thing, their paper loss is now exceeding 5 billion, is it creating any pressure? Yes but this is all supposed to happen. Like, for the dip in market, we need logical reasons to calm our mind, we are guessing everything even made Epstein the creator of Bitcoin. We are thinking out of the box haha but really this was completely unexpected.

This matter because bro their pnl loss is too big but it is unrealized so don't worry and they even has said to their investors that even if the btc dips to 25k we would still make it. So bro nothing to worry about and accumulate as much you can in this bear season.

[fikrett]

honestly i dont think it matters much as long as they have the cash flow to service their debt. unrealized losses are just numbers on paper until you actually sell and we all know saylor isnt selling a single sat. as long as bitcoin goes up in the long run this strategy is going to pay off big time. the market always freaks out over volatility but people who get the game know this is a long term play.

And Saylor knows it for sure.

He has enough funds to withstand any situation with BTC - and come up victorious from it, imo.

[Free Market Capitalist]

honestly i dont think it matters much as long as they have the cash flow to service their debt.

They don't have the cash "flow" to service their debt. They have cash saved to pay 2.5 years of dividends that they got by ATMing the common stock, diluting shareholders.

unrealized losses are just numbers on paper until you actually sell and we all know saylor isnt selling a single sat.

Unrealized gains is what Saylor has based his model on, so unrealized losses should matter as much.

as long as bitcoin goes up in the long run this strategy is going to pay off big time.

The problem, as I have explained several times, is that even if the price of Bitcoin rises in the long term, with Strategy's reverse DCA, they get a much lower return on it.

[Alex077]

 Strategy is starting to shift away from common equity and toward preferred shares, the company’s CEO said Wednesday on Bloomberg’s The Close. Basically, instead of selling regular shares to fund Bitcoin purchases, the company plans to rely more on issuing preferred stock going forward.

It’s worth noting that the deal is being backed by several major institutional players, including Morgan Stanley, Barclays, TD Securities, and Moelis & Co.
   https://cointelegraph.com/news/strategy-ceo-preferred-stock-fund-bitcoin-buys
(STRC) is Strategy’s perpetual preferred stock, launched back in July and aimed at investors looking for stability, since it offers annual dividends of over 11% -which definitely caught people’s attention.

On Wednesday, STRC closed back at its $100 par value for the first time since mid-January, something the CEO called the “main event of the day.”
Earlier this month, the shares dropped below $94 when Bitcoin fell under $60K, but now that they’re trading back at par - the level Strategy set as its floor - the company can once again issue shares to finance additional Bitcoin purchases.
Meanwhile, Strategy’s common stock (MSTR) actually closed Wednesday down more than 5%, at $126.14.

At the same time, analysts are warning that the crypto bond market is getting crowded. More companies are competing for a relatively small pool of traders, and in some cases the value of crypto holdings on company balance sheets is starting to exceed the value of the companies themselves.

[Free Market Capitalist]

Strategy is starting to shift away from common equity and toward preferred shares, the company’s CEO said Wednesday on Bloomberg’s The Close. Basically, instead of selling regular shares to fund Bitcoin purchases, the company plans to rely more on issuing preferred stock going forward.

Not really. He said the same by mid last year because he had complaints from people about him ATMing the common stock, that he was shifting to preferreds so he wouldn't ATM the common stock so much, only if it was above 2.5 mNAV, and if below that only on exceptional occasions. He simply did not keep his word, and whatever he may say about it now has the same credibility in my eyes.

He can say he plans whatever he wants, but the main source of liquidity is common stock. Lately, he hasn't been able to ATM any preferred stock other than STRC, which is the most junk of all because he has focused on raising the dividend when the profitability of the asset on which it is based was falling the most.

On Wednesday, STRC closed back at its $100 par value for the first time since mid-January, something the CEO called the “main event of the day.”

Lol.

[Alex077]

Strategy is starting to shift away from common equity and toward preferred shares, the company’s CEO said Wednesday on Bloomberg’s The Close. Basically, instead of selling regular shares to fund Bitcoin purchases, the company plans to rely more on issuing preferred stock going forward.

Not really. He said the same by mid last year because he had complaints from people about him ATMing the common stock, that he was shifting to preferreds so he wouldn't ATM the common stock so much, only if it was above 2.5 mNAV, and if below that only on exceptional occasions. He simply did not keep his word, and whatever he may say about it now has the same credibility in my eyes...

yeah, they launched the preferred shares around July ’25 and already hinted at a gradual shift toward that structure. Now he’s just putting more emphasis on it.
Personally, I think MSTR has simply run out of steam in this market. People aren’t as eager to buy it anymore, mainly because there are no dividends - the only return comes from price appreciation. At the end of the day it’s just a leveraged bet on Bitcoin: when BTC goes up, MSTR usually moves even harder to the upside; when Bitcoin drops, it falls even harder.

In a market like the current one, I don’t really see a lot of buyers lining up for that kind of exposure. MSTR’s returns are all over the place - it can be +300% in a good cycle, or -60% like we’re seeing now.
STRC, on the other hand, offers around 11.25% annually, with regular dividend payments. On a declining or sideways market, it’s pretty obvious why that starts to look more attractive to investors.

Strategy basically adjusted to changing market conditions, and honestly that’s not a bad move, but that’s just my take on it.

[The Sceptical Chymist]

He has enough funds to withstand any situation with BTC - and come up victorious from it, imo.

MSTR has bet the farm on bitcoin and instead of it just being an alternative to fiat for the corporate treasury, it turned the corporation into one big gamble on the success or failure of bitcoin.  If you can say with a straight face that Saylor has enough funds to weather a market crash much bigger than what bitcoin is currently going through (it seems bigger than a dip to me), you should take off those orange BTClinders. 

Seems to me Saylor keeps piling on the risk with each bitcoin purchase he makes, but since nobody has ever done anything like this before it has a lot of people star struck.  I'm telling you, those awful new financial metrics like mNAV are a joke.  Wall Street has always had more greed than brains, so it might take a while but you'll see.

we all know saylor isnt selling a single sat.

And you're basing that on what?  All of the bitcoin buying or all of Saylor's talks hyping up all the bitcoin buying?  Serious question: do you trust him more or less than CEOs/presidents of other companies?  Because I have to tell you, they've been known to lie, steal, or just about anything else to enrich themselves at the expense of their shareholders.  But aside from all of that, there's the more banal possibility that Saylor could either change his mind about the path he's on OR be forced to sell.

[Donneski]

They don't have the cash "flow" to service their debt. They have cash saved to pay 2.5 years of dividends...

That’s an important distinction. The truth is lot of people assume MSTR has some endless operating cash stream but most of the Bitcoin strategy was funded via equity dilution and debt. It’s sustainable as long as capital markets stay open but it’s not the same as organic cash flow.

Unrealized gains is what Saylor has based his model on, so unrealized losses should matter as much.

I totally agree with you. You can’t celebrate paper gains and then dismiss paper losses as irrelevant. Both affect perception, credit risk and shareholder confidence especially for a company that made Bitcoin its core identity.

...even if the price of Bitcoin rises in the long term, with Strategy's reverse DCA, they get a much lower return on it.

This is actually the part many people do not pay much attention to. Timing and cost basis matter. If Bitcoin does a 10x but your average entry is near cycle peaks, the outcome looks very different from someone who accumulated through bear markets.