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33 sats \ 4 replies \ @south_korea_ln 9h \ on: Strategy's Suspiciously Poorly Made Purchases? econ

Good timing, a good friend, who unfortunately likes to shitcoin, tried to convince me today to get into MSTR. His take is that because currently it's trading at (or below?) Bitcoin value it's a good deal. Taking off the maxi-hat, why is this a good/bad idea?

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33 sats \ 2 replies \ @SimpleStacker 8h

It may depend on how the different MSTR securities are structured, but you don't actually own any bitcoin if you buy MSTR, and general shareholders are gonna be the last in line to get any bitcoin back in the event that things go south. They're generally gonna have to pay back creditors, vendors, and maybe even employees, before shareholders get any of what remains.

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0 sats \ 1 reply \ @south_korea_ln 8h
different MSTR securities are structured

Right, they are selling lots of derivative stuff these days now, no?

in the event that things go south

That friend really bought into the idea that big crashes are now a thing of the past with the institutional interest. Probably watched too much Saylor propaganda~~

Overall, hard for me to see an upside to it all, even if I were to want to play Wallstreet games.

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0 sats \ 0 replies \ @denlillaapan OP 8h
derivative stuff these days now,

that's a weird definitional question. No, they're selling a lot of preferred shares (mostly STRC, which is basically a high-yield bank account at this point).

hard for me to see an upside to it all, even if I were to want to play Wallstreet games.

if you see an upside to bitcoin, there ought to be an upside to MSTR. (Basically the best steelman I can make)

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5 sats \ 0 replies \ @denlillaapan OP 8h

Good idea:

  • you get bitcoin exposure at par (i.e., you're not paying a premium so it's equivalent, financially speaking, to buying bitcoin).
  • you get whatever upside you think Saylor can eke out over time (read: amplification, future banking, leverage etc)

bad idea:

  • it's financialization of bitcoin rather than bitcoinization of the world (= against cypherpunk ethos)
  • it's not self-custody: several layers of permission (brokerage -> Strategy, Strategy -> bitcoin)
  • Saylor's amplification/leverage play might not work out (or he/Coinbase gets hacked, or Trump nationalizes his stack etc, etc)

In a nutshell, that's basically the Dummies summary of my long read (#1081555)

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