Replies to post #902 on MicroStrategy Inc (MSTR)

[nosfelle]

You're comparing apples to oranges.

Debt is a traditional loan that requires repayment with interest, while convertible debt is a type of loan that can be converted into equity (ownership shares) in the company at a later date, usually under specific conditions, which is the case with $MSTR.

Over the last five years, MicroStrategy has borrowed $7.27 billion via convertible debt securities and doubled its share count to purchase bitcoin (BTC).

Further, accretion is directly related to business expansion through incremental growth of assets and earnings, which is much like a merger or acquisition, or the continuous purchase of BTC.

At no time in the past has convertible debt been linked to such a finite asset, with such widespread and violent adoption.

Might be time to do a bit of research.

[Slim6]

Massive dilution of MSTR shareholders continues. You will see more preferred shares of STRF, STRK, STRD, and more. They have really pulled the wool over the eyes of naive "investors". The preferred shares are outnumbering the common shares.
Naive investors thought there would only be $17 billion in debt commitments to preferred shareholders, but now they are going to be over $25 billion in debt.
This updates the true intrinsic valuation for common shareholders to ($640000*102000-$25000000000)/284000000
The company value depends superlinearly on Bitcoin value.
The $102,000 comes from the current value of Bitcoin; it has dropped significantly in recent weeks.
The $25 billion is the first-in-line commitment to preferred shareholders. This has risen due to new prospectuses which show far more dilution to common shareholders.
The 284,000,000 is the number of common shares which will likely also rise as this dilution continues too.
The net result is that each MSTR is not worth $199 any more. Each common share is now worth only $141. Update your numbers. Beware.