If Strategy starts selling Bitcoin, it will be the beginning of the end
coinfeeds-bot on
tldr; Strategy, formerly MicroStrategy, holds $66 billion worth of Bitcoin and plans never to sell it. However, maintaining this strategy costs $689 million annually, including debt interest, dividends, and operating expenses. These costs are expected to rise into the billions in future years. The company relies on selling equities and preferred shares to fund its Bitcoin acquisitions and obligations, as it generates limited revenue from traditional business operations. Investors pay a premium for Strategy’s stock, trusting its management to deliver returns.
*This summary is auto generated by a bot and not meant to replace reading the original article. As always, DYOR.
magus-21 on
> has cash obligations to service its treasury in the form of coupons to debtholders
Gotta love it when multibillion corporations take on debt to buy Bitcoin
timburgessthis on
I do actually wonder how this will be sustainable or if it will all crash. It does sound like a ponzi scheme.
ChemicalAnybody6229 on
If they sell, it will cause massive dump
tianavitoli on
poors are going to focus on $690 million
the rich see 1%
**if your mom had wheels, she’d be a bicycle and everyone would ride her**
bbatardo on
I actually liked Saylor’s strategy until he went the preferred stock route. The moment he started obligating quarterly dividend payments it became a red flag since their way to raise funds is to dilute shares. Dilution was fine when it was done under senior notes with clear terms, but the landscape changed.
They really need a way to monetize their BTC holdings and not always rely on using them as leverage for more debt because it will collapse eventually.
HQ_Husky on
This is exactly the same as: who came first, the chicken or the egg? If he never sells as promised, it will cost $689 million annually. What’s the point? If he does sell eventually, however, it will be the best business move a company could make worldwide. So yeah, never selling and $689 million annually, or will he sell eventually? Who will be first?
leoundercoveralt on
Thats like having a net worth of 100k and having 1k on your credit card balance.
If the market gets so bad to where Strategy can’t pay it off just about every other company is fucked too.
Spank007 on
Strategy will never sell they’ll just borrow against their bitty
Is this not the unicorn big tech strategy, gain assets, gain market share – worry about how to monetise later 🤞
CilicianKnightAni on
I knew stretch sounded too good. Play fiat games ….. . Dca and hodl.
MaleficentShame1546 on
Limited Liability , can FTX
EthFan on
Seems totally legitimate, what could possibly go wrong?
CriticalCobraz on
MicroStrategy can take up a reasonable debt with their net worth as long as their debt isn’t too high or if Bitcoin’s price won’t drop like 70%+ and stays at that level for a long period of time.
Is it a gamble? Yes
Is it a calculated risk? Yes
Is it reasonable? Maybe
robis87 on
no better indicator of where this is going than the cratering MSTR price
absurdcriminality on
That’s gonna be a problem lol
SlashRModFail on
Microstrategy is fucked
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If Strategy starts selling Bitcoin, it will be the beginning of the end
tldr; Strategy, formerly MicroStrategy, holds $66 billion worth of Bitcoin and plans never to sell it. However, maintaining this strategy costs $689 million annually, including debt interest, dividends, and operating expenses. These costs are expected to rise into the billions in future years. The company relies on selling equities and preferred shares to fund its Bitcoin acquisitions and obligations, as it generates limited revenue from traditional business operations. Investors pay a premium for Strategy’s stock, trusting its management to deliver returns.
*This summary is auto generated by a bot and not meant to replace reading the original article. As always, DYOR.
> has cash obligations to service its treasury in the form of coupons to debtholders
Gotta love it when multibillion corporations take on debt to buy Bitcoin
I do actually wonder how this will be sustainable or if it will all crash. It does sound like a ponzi scheme.
If they sell, it will cause massive dump
poors are going to focus on $690 million
the rich see 1%
**if your mom had wheels, she’d be a bicycle and everyone would ride her**
I actually liked Saylor’s strategy until he went the preferred stock route. The moment he started obligating quarterly dividend payments it became a red flag since their way to raise funds is to dilute shares. Dilution was fine when it was done under senior notes with clear terms, but the landscape changed.
They really need a way to monetize their BTC holdings and not always rely on using them as leverage for more debt because it will collapse eventually.
This is exactly the same as: who came first, the chicken or the egg? If he never sells as promised, it will cost $689 million annually. What’s the point? If he does sell eventually, however, it will be the best business move a company could make worldwide. So yeah, never selling and $689 million annually, or will he sell eventually? Who will be first?
Thats like having a net worth of 100k and having 1k on your credit card balance.
If the market gets so bad to where Strategy can’t pay it off just about every other company is fucked too.
Strategy will never sell they’ll just borrow against their bitty
Justt a friendly reminder [https://www.advisorperspectives.com/articles/2024/12/16/microstrategy-convertible-debt-scheme](https://www.advisorperspectives.com/articles/2024/12/16/microstrategy-convertible-debt-scheme)
Is this not the unicorn big tech strategy, gain assets, gain market share – worry about how to monetise later 🤞
I knew stretch sounded too good. Play fiat games ….. . Dca and hodl.
Limited Liability , can FTX
Seems totally legitimate, what could possibly go wrong?
MicroStrategy can take up a reasonable debt with their net worth as long as their debt isn’t too high or if Bitcoin’s price won’t drop like 70%+ and stays at that level for a long period of time.
Is it a gamble? Yes
Is it a calculated risk? Yes
Is it reasonable? Maybe
no better indicator of where this is going than the cratering MSTR price
That’s gonna be a problem lol
Microstrategy is fucked