Post by
James72 on Jul 06, 2023 1:08pm
How does $73MM equal $2.1B
Please correct me if I am wrong but when MSTR started buying Bitcoin in Aug of '20 their stock price was around $145. Today it is $370 an increase of approx. $225. With 9.5MM shares outstanding that is a market cap gain of approx $2.1B. The underlying business in between remains reasonably static with minimal to no growth. Since Aug '20, they have purchased 152K coins at an average $29,803. Today these coins are worth $30,285. That is a total gain of $73.3MM. Nice, but hardly worth $2.1B in market cap. I recognized they had an equity raise at higher levels and they structured some of their bitcoin linked debt at attractive levels. Both these factors are positive and worth some incremental market cap. But that incremental market cap is worth no where near $2B. Where does the extra value come from? Maybe Bitcoin will go to $100K maybe it won't, I frankly don't know. Either way it seems like if you are bullish you are paid better to buy the underlying as MSTR seems like an ineffcient vehicle to represent Bitcoin. Am I missing something here?
Comment by
MaterialsMan on Jul 12, 2023 11:44am
James 72, You have raised some interesting as well as confounding questions. Another one I might add is the question of what has driven the share price up about 50% in the last month while the price of bitcoin has for all practical purpose gone sideways. MSTR has been to now a barometer for bitcoin. This in now completely out of whack.
Comment by
wallpaper2 on Sep 25, 2023 7:14pm
Manipulation is my guess. A lot of $ to be made = corruption.
Comment by
caretired1 on Feb 07, 2024 1:39pm
I agree!! Company value is way less when you factor in the debt to buy the coins. Why pay such a premium when you can buy an ETF??