the issue on the downside was that they had borrowed to buy the bitcoin so technically they were insolvent. Now bitcoin is so high that it’s really just a wallet with a small software business.
Saylor was on record on the interviews that even if bitcoin goes to $0, mstr can pay off the debt using operating profits They had an over collateralized bitcoin loan with Silvergate for $200M that had a liquidation price of $3500/btc, which they paid off at a discount when Silvergate went bankrupt, but it was not all their bitcoins and keyword was collateralized (secured) loan I think they have SEC regulations he would not have lied about this on record, risking his billionaire lifestyle and yachts for Bitcoin fame and popularity
If you are right, that would have been a buying opportunity. I think they had 2Bn of debt, not 200MM. The operating business does about 200MM/year in Gross profit. the operating business lost 1Bn in 2022 in EBIT. I don't understand this part but its a discussion i'm having with another person. If that is true, the market wouldn't believe his statements. CEO's lie all the time on the record with forward looking projections, etc. They do it in a grey area of what they "believe" and what is black and white.
We're beating a dead horse, it was 200m secured loan, 1B convertible note and some other debt-equity type, from what I remember, but none matters now, waiting for mstr to issue more shares to buy more bitcoins and/or issue debt to buy more bitcoins Price action veblen effect is starting early
convertibles are bonds with call opions. On the downside they are debt. on the upside they are stock.
What I can't understand is that if this whole bitcoin rally is making shares of mstr surge , why can't the thousands of traded companies out there do the same thing they did and reap the gigantic benefits of seeing their stock price catapult......now you might think well there is risk, however according to most bitcoin geniuses the only way for bitcoin is up....
Every time mstr did this in the past, the shares of mstr went up the next trading day, not down Saylor is on record that when mstr share price gets too high, the company will sell shares to buy more bitcoins Let's see tomorrow if the market likes this news as it has in the past