CRYPTO

100K btc incoming 

100K is right around the corner 

@vanzack

 There is so much money flying into crypto. It¡¯s mind boggling

3.23 Trillion as of this point.  Expected to be 4 plus in the next couple weeks and close to 5 by years end ..  

and MSTR is still blowing up

Short sale mammoth Citron put out a hit piece on MSTR today about how far the stock is valued away from the equity they own in BTC, thus the sell off after the morning bump.

They are right but it is likely the drop will not last all that long IF BTC keeps moving up as it is.

@wallstreetcappers

yeah , just noticed it was a morning bump. I spoke too soon . I'm going to look up the hit piece by Citron that you're talking about.

@ZiggyDawg

 Pretty much its just based on my comments above and what Van referenced that the market cap is worth much more than the equity in their BTC holdings and it is not a very efficient vehicle to own for just BTC value but it is a momentum mover and has a higher beta than BTC itself. If someone wants BTC pure and simple the best play is IBIT to me as their expense ratio is low and it is just a ETF holding BTC nothing else.

Blew up, then blew down.

Crazy day.

BTC up, MSTR way down.

I am too lazy there has to be a source of the market cap value of BTC based on their equity in the holdings. I will have to poke around and find out. I would have to bet that the market cap of the stock is likely 3x what the value of the BTC is.

Quick look my estimate is pretty close. They have 330k or so of the BTC and their average price is allegedly 50k now so their equity is 50% of the price and looks like the ratio of equity to market cap is about 3x. More likely fair value is more like 1.5x so potentially it could drop more.

"Volatility is vitality for MSTR" Michael Saylor

It took me a while to understand this, and I think I do - but still not 100%...

If the stock goes up...  Of course this is what the company and shareholders want and benefit from.  But it also makes the selling of convertible bonds more attractive.  Nobody wants to buy a convertible bond on something that is flat - because the chances of converting are so small.  But something that has wild swings in stock price is very attractive because the upswings can be converted.

If the stock goes down....  MSTR can issue convertible bonds and "ATM" at the money stock sales to generate cash to buy more btc, which increases BTC per share and stock price.

It is actually pretty amazing.

Please help me understand this better if I got something wrong.

I consider ATMs more toxic than convertibles because they immediately dilute the common holder the moment the company sells shares. Converts might take 2-3-4-5 years until conversion so while the end result might be the same the duration for when the dilution takes place is longer. ATMs are also sneaky the company can use them and the shareholder might not even know until either the company discloses it or they have an earnings report and admit how many shares are outstanding. 

It would be interesting to dig out all the convert prices since MSTR has been converting for a LONG TIME. I have to think some of those earlier converts are massively deep in the money since they had a stock split and all it is likely some of the early converts might be in the like 50 buck range or lower. I could find out but I dunno I am a lazy investor and since I dont have any MSTR now I am not hunting.

I think what Mike is inferring is that having interest in the stock means there is motivation and demand for the debt too so a stock that has less implied potential upside will have less ability to float debt and especially at decent terms.