Is MSTR going to be this cycle’s FTX👀? They got too much corn
Discussion
I think they will get too much debt and buy too high. A pump followed by a recession would break them.
I don’t think so. They are really not that leveraged. And the debt is unencumbered
I think the way it could play out is if Bitcoin goes much higher, MSTR share price moons, MSTR issues more debt to buy Bitcoinetc, until MSTR doesn't have the cash flow to service the debt without selling Bitcoin. Then the Bitcoin price crashes, their debt is not serviceable and they have to sell into a falling Bitcoin market to pay the interest on the debt. Perhaps Saylor has learnt since the dotcom bust, but I'm not certain that he will remain grounded during the heights of a bull market.
It's a bloc of shareholders collaboratively holding half a million Bitcoin on leverage using some random software company as a vehicle.
I don't think they have the same problems as ftx.
I find their strategy interesting. I'm skeptical of some of the derivatives, but I'm not a bond expert so WTF do I know?
The main problems I would like Microstrategy to solve are:
1. Transparancy
They need a proof of reserve.
2. Cybersecurity
Outsourcing your bitcoin Cybersecurity to Coinbase is not ideal, but I think companies like AnchorWatch make this problem easy to fix.
FTX had 1 bitcoin MSTR has 439,000 bitcoin
Didn’t FTX say they had 30,000 bitcoin until they didn’t because of the deleveraging?
Yeah I mean they just didn’t have it
More a question about whether MSTR over leverages themselves and has to sell some BTC to cover
I mean I think they are currently a little under leveraged (something like 20%). They have a much healthier balance sheet than most public companies. Nearly a zero percent chance of selling BTC imo
Maybe, but superficially Coinbase seems way more analogous.
Right, but don't they hold the keys to the MSTR stack?
The thought has crossed my mind, especially with other companies spinning up to do the same thing.
Staying humble and stacking sats 🫡