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0 sats \ 2 replies \ @HardMoney 9h \ parent \ on: Saylor's Latest Strategy: Raising Funds to Pay Dividends econ
Except madoff was committing blatant fraud and was insolvent while MSTR and associated instruments are rather transparent in what their strategy is. Every investor in MSTR generally knows and wants MSTR to acquire more BTC by issuing more shares and other instruments and accepts the risks.
true... makes it better that Saylor isn't lying/deceiving investors. Is the economic mechanism different?
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There is a pyramid type of structure to the business in the sense the success of refinancing requires there is investor interest in the model in the future.
I think a better mental model is a Flywheel. When BTC is going up the business and strategy will scale considerably.
If BTC goes down it’ll be interesting to see how MSTR can weather the storm. In general tho assuming BTC doesn’t go to $0 they should be able to delever and pay for things by diluting common shareholders and if no one wants to buy more shares the bitcoin could always settle debt and obligations.
IMO for the model to fail it probably means something went significantly wrong for bitcoin. Their business could likely absorb 1-2 year bear market cycle without becoming forced sellers
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