MicroStrategy stock forum
MSTR they are diluting all the shares everyone dump! before u hold the bag this is another DRYS. THEY CARE NOTHING ABOUT THE SHAREHOLDER.
MSTR Here is some math that can be done on any standard calculator: Dilution Ratio = New Shares Issued / (Existing Shares Authorized + New Shares Issued) = 11,000,000,000 / 11,330,000,000 = 0.9709 or 97.09%.
Yep, existing shareholders will eventually see their ownership diluted by 97.09%. Put another way, their proportional ownership of the company will drop to just 2.91% of what it is today once all stock has been fully issued.
That's not a typo... 97.09% dilution! This is catastrophic dilution for existing shareholders unless the capital raised is deployed so perfectly and so effectively that it offsets the reduction in ownership. That would be a first for mankind.
I'm sure the fanboys will argue that Saylor is such a genius and he knows what he is doing. He is debasing fiat, he's a maverick, he's printing money. In the 232 years of the New York stock exchange no one has ever been smart enough to figure out how to do this until Savior Saylor came along. Their big reason for believing? Bitcoin will increase as more purchases are made and skyrocket in value. It's that simple man! We'll all be millionaires!
Ok, fair enough. Let's do some more math to see how high BTC will need to rise to offset the proposed dilution and make some profit.
If we start with $350 as the base share price and assume that Saylor will issue $5 billion worth of stock each week to buy tokens (that's an extremely aggressive 14.3 million shares weekly), it will take him almost 15 years (14.83) to issue all the shares.. That's fifteen years of $5 billion weekly purchases. Let's assume the market keeps giving MSTR a 2:1 premium above BTC spot for a while and slowly migrates to a 1:1 ratio over the 15 year period. We will also assume an annualized (and staggering) 40% increase in BTC spot each year for 15 years due to the constant Saylor buying pressure. That means BTC would be fetching $14,144,602 for each token after 15 years. Incredible for sure.
By the end of 15 years, MSTR would own 8,381,831 coins, nearly half of all bitcoin tokens in the active float. The MicroStrategy market cap will have swollen from $86 billion present day to an unbelievable $237 trillion at the end of 15 years. The share price would be a whopping $10,505 per share, which is a 3,638% increase. That equals a 27.66% annualized return for 15 years, which is unheard of. That would make Warren Buffett (13.95%) and the QQQ (19%) blush with envy.
Fantasy land? Yea, probably so. Everything would have to go perfectly for it all to work. There would have to be a constant stream of buyers willing to purchase new share offerings. No crypto winters, no new crypto regulations and no unfavorable tax treatment for 15 years.
But, let's say you buy the hype and think Saylor can pull it off. And the chance at 27.66% annual returns is too tempting to pass up. That is until you figure out how much the same $350 investment would be worth in 15 years if you simply had bought BTC directly and not using MSTR as the proxy. That same $350 would have grown to $51,369 which is a 14,577% increase. That equals the same 40% annualized increase in Bitcoin used in the model. That's almost 5x more return when owning BTC direct than owning it through MSTR. Why the huge difference? The power of compounding over time. The full $350 will go to work immediately in BTC earning the 40% annually, rather than having the first years being hampered by the dilutive effect until the compounding effect of Bitcoin appreciation overcomes the dilution.
That means you will have paid Saylor (and his Wall Street buddies) a staggering $40,864 commission to purchase Bitcoin for you over the 15 year period... For an initial $350 investment. For some reason Savior Saylor is not telling you that part. Like I said in an earlier post, there is no free ride in life.
MSTY An infinite money engine for you:1) Put 100% into
MSTY2) Accumulate its ridiculously high monthly dividend payments in cash.
3) Use that cash as margin to sell weekly At the Money PUTs in
MSTR over and over again4) Use the PUT premium to buy
MSTR sharesAs the dividend cash accumulates each month you will be able to sell more and more PUTs each week to buy more and more MSTR. Eventually you'll wind up with more SMSTR shares than if you had put 100% in SMSTR in the beginning but you also gain
MSTY price appreciation and all of its dividend income.
MSTR fools rushing into the wood chipper, as Saylor bloats stock.MSTR sub 300 is certain. Saylor upping his blood pressure meds.
MSTR This bear should take us under 300
MSTR shorts could accidentally cover this to the moon hereMSTR let’s go 377tradingview.com/x/5iEOG2vT
MSTR Don't just take my word or use my math, here is Barrons take: tradingview.com/news/DJN_DN20241224002034:0/
MSTR What's Michaels big selling point he pushes about Bitcoin all the time?? "There's only 21 million tokens that will ever exist, 20 million of which have already been mined. That's it, no more! The scarcity is what makes it so valuable and will continue to increase its price!" blah-blah.He understands that keeping a tight lid on the number of tokens is key to the ability of BTC to increase in price.
Yet he is perfectly comfortable with bloating MSTR shares by 30 fold, from 330M to 10.330B shares, and Preferred Stock by 200 fold, from 5M to 1.05B!
That is not just overly ambitious, that is satirical!
Current shareholders should use some common sense here: The law of Reversion to The Mean will would dictate that as MicroStrategy issues massive amounts of new shares, the share price would inevitably fall due to dilution, wiping out any potential gains for current shareholders even as new Bitcoin is purchased. There is no free ride in business... Never has been, never will be.
If you really believe that MSTR shares will absorb the dilution and retain their current $350 valuation, then shareholders should demand that Saylor use the shares to buy AAPL for 3.5T in a stock swap and have a real business.
Can't wait to see AAPL's reaction to that idea.