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Do you think MicroStrategy is overvalued?

They have 210,840,000 shares outstanding and hold 386,700 Bitcoin.

386,700 / 210,840,000 = .00183 BTC per share.

At a current price of $97,000 per Bitcoin, that’s $178 worth of Bitcoin per share… current share price is $396.

They will constantly be acquiring more Bitcoin, but they will also be diluting their shares in the process. They sell new stock ATM and their convertible debt holders will convert to shares in the future.

MSTR will continue to grow larger through this strategy, but are we overlooking the risk of significant share dilution as investors?

Just thinking out loud here.

#bitcoin #microstrategy

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Discussion

Speedster 1y ago

It’s telling that Saylor doesn’t buy his own stock he buys bitcoin.

BitcoinStu 1y ago

well, to be fair, he does already own a controlling interest of preferred stock... which is more of his stock than any other founder of any other tech company that is publicly traded owns.

Speedster 1y ago

That’s a fair point, perhaps a better argument would be if you already owned MSTR & Bitcoin any extra funds should be put towards more bitcoin.

BitcoinStu 1y ago

The bottom line is that while you get a short term premium over bitcoin by buying MSTR there is considerably more risk. Regulatory risk, execution risk, custodial risk.

For me any premium I might get from MSTR is far outweighed by owning a self-sovereign asset directly.

Orange Pilled Dictator 1y ago

The variables are price per BTC, rate of dilution vs rate of accumulation.

Learn About Bit 1y ago

Agreed, not quite sure how this will shake out in the long-term. But it seems like once this convertible debt is converted down the line, there could be heavy dilution.

Orange Pilled Dictator 1y ago

But what does the BTC look like in dollar terms during that conversion/dilution? The beauty is that none of us know. Big balls required for this bet.

Learn About Bit 1y ago

Yea I guess there are a lot of variables, a big one seems like that preset conversion price.

Orange Pilled Dictator 1y ago

I think a common mistake is to consider it only as a single snap shot in time. If the price gets ahead of itself, does that mean it's time to sell? If nostr:npub15dqlghlewk84wz3pkqqvzl2w2w36f97g89ljds8x6c094nlu02vqjllm5m continues to run the playbook, I think it's worth it to hold.

Learn About Bit 1y ago

I wonder if MicroStrategy stock can actually outperform Bitcoin over a long period of time. If they’re stacking bitcoin by diluting shares then it seems like that would cancel out the added value proposition of the additional bitcoin.

But for MicroStrategy it’s great because your company is growing in size.