5 hours ago
MSTR net came retired May 1. My greeting media stops past Thursday (here and here) asked for a preview. We don't speech astir stocks, truthful I planned to zoom retired and deed themes. While preparing, I had to suppress the eye-roll reflexes that MSTR triggers.
MSTR, of course, is the ticker awesome for MicroStrategy, oregon Strategy, arsenic the institution is present known. Strategy, fronted by Michael Saylor, pioneered the “bitcoin treasury” exemplary that’s present been copied by Metaplanet and dozens of different companies. Strategy plans to rise $84 billion, according to its astir caller announcement, crossed equity and fixed income instruments.
Here are 3 questions:
1. Earnings?
MSTR "earnings" and "price targets" are... Well, they don't truly mean the aforesaid thing, particularly erstwhile the effect of ASC 2023-08 is backed out. It's conscionable the terms of bitcoin and financing, plain and simple. Wall Street analysts and pundits should get that right.
2. Strategy?
You can't conscionable say, "Strategy." You person to say, "Strategy; you know, it utilized to beryllium Microstrategy." Like Prince, Puff Daddy, Kanye West and Twitter. NB: folks accidental "strategy" (small "s") a batch already.
3. Don't beryllium a hater?
MSTR supports a marketplace headdress of $107b with bitcoin holdings of $53b and laser-eyed goodwill. No lifeboat, nary parachute, nary evident Plan B. If it fails, the bitcoin marketplace could instrumentality the blame.
Those eye-rollers (and immoderate obsequious media coverage) notwithstanding, we tin hold that:
- The capital raises are genuinely awesome. The unit is beardown successful this one.
- MSTR is up 36% connected the year, compared to little than 5% for bitcoin. Who americium I to propulsion stones?
- MSTR cleverly uses banal terms volatility arsenic a feature, not a bug, for 1) issuing mouth-watering converts, 2) attracting listed options volume, and 3) firm "yield" strategies. (Just delight halt calling option-selling a "yield strategy." And I said "strategy" again. Small "s".)
- The preferreds (STRK and STRF) deed the people with immoderate folks who similar preferreds. Some of my preferreds friends are smitten.
MSTR created a movement
Strategy (big "S") has not lone created a movement, but a category. Levered MSTR ETFs (including this caller one which pays "income") service the marketplace for whom MSTR's 70 vol is dull. Grayscale announced an ETF that tracks 30 companies that clasp astatine slightest 100 bitcoin.
Last, but not least, Cantor Equity Partners, a SPAC, is merging to signifier Twenty One Capital, which volition clasp $3 cardinal of bitcoin. Mention this inclination successful a country afloat of pundits and they'll outcry "Gamestop!" successful unison. It's fun.
This is each fine. Adding bitcoin to the treasury of non-crypto companies* is an absorbing trend. (And that doesn’t see crypto-native companies, similar CoinDesk's genitor company, Bullish.)
But it's lone bitcoin astatine the moment.
US (bitcoin) exceptionalism
Despite the loosening of U.S. regulatory zip-ties connected integer assets and the caller flurry of ETF filings, bitcoin inactive dominates the speech (it inactive accounts for about two-thirds of the full cryptocurrency market).
Again, that's good if we are talking astir a store-of-value plus contributing to a firm treasury different allocated to currency and treasuries. However, the increasing fig of flavors of bitcoin exposure--leverage, yield, optionality, protection--are taking the spot of acquisition astir what different blockchain assets anticipation to deliver, and wherefore it is important to walk much clip reasoning astir the plus class.
Until recently, that was fruitless for galore investors and advisors, since brokerage- oregon futures- relationship implementation was not available. (Of course, it has been for ETH, but you request much than ETH to deliberation astir the "digital plus class." Lack of enthusiasm for ETH concern vehicles, we believe, has struggled successful portion for this reason.)
If 2024 was bitcoin's "coming out" year, we anticipation that 2025 gives investors and traders opportunities to deliberation deeper and much broadly, and to instrumentality accordingly. If not, the U.S. crypto investing communicative volition commencement to dependable similar a "bitcoin maxi," and that feels similar leaving wealth connected the table.
English (US) 