pull down to refresh
30 sats \ 7 replies \ @grayruby 4 Apr \ on: Has Michael Saylor's Strategy built a house of cards? AskSN
I do think he has pushed it too far but I don't think it is a house of cards.
Well balance reply!
How do you think Strategy gonna survive a recession?
reply
There debt level is very low compared to the value of their Bitcoin. I don't think there is any risk there unless something catastrophic happened and Bitcoin dropped back sub 30k. The stock would absolutely get crushed and they wouldn't be able to issue debt or equity to buy Bitcoin during that period. An interesting thing to watch would be if the stock traded at a discount to the bitcoin holdings like it did during the last bear market would they sell some bitcoin to buy back the stock.
Currently it makes sense for them to sell share to buy Bitcoin because investors are buying MSTR at 1.5x the value of their Bitcoin holdings. Say that cut in half and the company was trading at 0.75 of their Bitcoin holdings, it would make sense for the to sell some Bitcoin and buy back their shares and wait for the discount to close to buy the Bitcoin back.
reply
It does make a lot of sense. My suspicion is based on Strategy buying paper Bitcoins instead of real. Is that true?
reply
If you believe that Coinbase doesn't have all the Bitcoin their customers have claims on then it is true.
Some of their Bitcoin is custodied with Fidelity.
I would like to see them move it once a year just to prove it is all there. But maybe they are scare to just in case it is not. Haha
reply
That's the problem and Strategy needs to address it before late.
If conbase falls, thatbcan be catastrophic to strategy as well.
reply