What is the world coming to?
Microstrategy (Ticker: MSTR) is joining the Nasdaq 100. Let me explain why this is bar sh$t crazy.
What does Microstrategy do? They have a mediocre software business that pivoted towards starting to buy BitCoin. Nothing wrong with that.
The problem is the how they do and the math behind it. They buy BitCoin by selling shares in their own OVERPRICED equity.
Example;
Current Fully Diluted Share Count: 206.7 million
Share Price: $426 (pre-market)
Market Cap: $88.4 billion
Bit Coin Owned; 423,650
Bit Coin Price: $103,961
Value of Bit Coin: $44 Billion
Implied Value per share: $212
Most holding companies trade at a discount to the value of their assets ~ say 10%. MSTR is trading at a 100% premium.
If you could sell your stock at double what it is worth, you would do that all day long. Wouldn’t you?
If you want to buy Bitcoin, buy Bitcoin. Do not buy MSTR.
It is amazing how much stupidity there is in the financial markets.
Microstrategy (Ticker: MSTR) is joining the Nasdaq 100. Let me explain why this is bar sh$t crazy.
What does Microstrategy do? They have a mediocre software business that pivoted towards starting to buy BitCoin. Nothing wrong with that.
The problem is the how they do and the math behind it. They buy BitCoin by selling shares in their own OVERPRICED equity.
Example;
Current Fully Diluted Share Count: 206.7 million
Share Price: $426 (pre-market)
Market Cap: $88.4 billion
Bit Coin Owned; 423,650
Bit Coin Price: $103,961
Value of Bit Coin: $44 Billion
Implied Value per share: $212
Most holding companies trade at a discount to the value of their assets ~ say 10%. MSTR is trading at a 100% premium.
If you could sell your stock at double what it is worth, you would do that all day long. Wouldn’t you?
If you want to buy Bitcoin, buy Bitcoin. Do not buy MSTR.
It is amazing how much stupidity there is in the financial markets.
