Replying to Avatar utxo the webmaster 🧑‍💻

MSTR did not find a glitch, they are just taking on risk, which works as long as there isn't a massive crash

Bitcoin does have a way of flushing out massive amounts of leverage. Not saying it will happen, but it CAN happen

To summarize:

- convertible notes: give option to debt holders to convert into shares, diluting current share holders. But if it doesn't pump, can only pay back by selling BTC.

- straight debt: mstr doesn't have enough income to pay back all debt holders, so they can become a forced seller of coins or shares (dilution) during a dump of BTC or mstr stonk

- their force sells can dump the price further creating a death loop of even more selling

Yes it looks genius after a huge pump but it could potentially be lights out if we crash 70%

But we probably won't
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Mark Camper 1y ago

Mstr is fine even if we dump back to $3k. They carry close-to-zero cost obligations on their debt.

The premium and stock price will vary, and probably converge close to natural real interest rate over the looong run, but they can't really go bankrupt as long as btc exists.

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utxo the webmaster 🧑‍💻 1y ago

Their debt expires and they're paying about $60m per year in interest

Not saying they'll go bankrupt, my main point is the high reward comes with high risk, meaning the value of your mstr shares can get crushed way harder than btc