^ I would say he would just buy more.
That would be it.
 

You (hZti) might need to read through the thread or even get some more ideas about Saylor/MSTR and their BTC approach.

They are not trading and/or trying to play BTC's price waves, so they will just largely ride out any BTC price waves, and presumptively they would not have as much capital coming in during the dipping periods.. So yeah, you are correct that Saylor's money lenders would dry up.. new money would not be coming in.. but that does not mean that the money has to flow out, because Saylor/MSTR owns all the BTC that they buy and the have already accounted for the debt, so they would still have to service the debt, in dollars and at close to zero interest rates.   

Sure, personally, I would think that a better strategy for MSTR is just to keep buying no matter the BTC price, and to have cash reserves set aside to just keep buying no matter the BTC price, since surely most of the new buys (weekly and sometimes more often in recent times) are coming from new money coming in, and so Saylor/MSTR is the hotest game in town and will be able to continue to buy since there seems to be a lot of interest and appetite for what he is offering.  I personally believe that they have enough cash reserves that they could structure a buy BTC no matter what the BTC price (on a weekly or even monthly schedule) that could well be scheduled out for 48-60 months or longer.. yet I am merely speculating that Saylor would employ such a buy no matter what strategy, even though he has stated several times that he/MSTR is "buying no matter what" and also buying tops which comes with the territory of using hype money to buy.... but when the hype money dries he could still buy, but as far as I have heard, he has not stated that buy no matter what on the way down too to be an actual concrete strategy that they have scheduled out.

So many guys, like you (hZti), ask about Saylor/MSTR's BTC sell strategy (as if it were some kind of an "obvious" necessity to consider blah blah blah), which you guys are delusional. ..since MSTR does not have a sell strategy.. They specifically, explicitly and repeatedly have asserted that they don't have a BTC sell strategy, which implies they don't need such strategy and they do not plan to change their minds and to start to have a sell strategy into the future.  

Sure, at any time, MSTR/Saylor could change their mind(s), and they could announce a BTC sell strategy, but that would undermine their credibility in regards their repeated, specific, and explicit statements about not having a sell strategy or planning to have a sell strategy.. so I doubt that it would be anything even close to a good idea or even a logical outcome that they would announce any such sell strategy or to adopt one. .. The only thing that I might contemplate as their potential sell strategy would be if they or their custodian got hacked or if the US Govt (or some other government) held a gun to their head(s) and told them that they have to sell or face the consequences.. and sure those could playing out as sell strategy scenarios that could end up being consequences of having so many coins that they have to manage.. .. not specifically high odds of happening, but still not out of the realm of "shit that could happen."

MicroStrategy Just Delivered $642 Million in Bitcoin to Investors




This amount represents the gains from MicroStrategy treasury operations alone. As noted by Saylor, this notable performance reinforces the company’s commitment to "maximizing shareholder returns."
The MicroStrategy executive chairman clarified with his post that the company remains focused on utilizing Bitcoin as a core pillar of its strategy. That is, Bitcoin remains key in delivering long-term value to its shareholders.

Link: https://u.today/microstrategy-just-delivered-642-million-in-bitcoin-to-investors


Microstrategy Every activity of the company is very beautiful which makes shareholders more confident about the future, Saylor has encouraged his Bitcoin to be more long-term. Because he has seen the maximum benefits in these few months, he has asked shareholders to focus on Bitcoin long-term investment. Saylor is wise because he is more cautious about the future of Bitcoin, he is Saylor to invest in Bitcoin to raise more money.

There are some questions about Saylor's BTC ownership if he dies later.

Saylor gave two words, he will burn his BTC key. And he will also donate his BTC to charity.

With the statements that have been issued by Saylor on several podcasts, of course, the future picture of Saylor's BTC ownership will die if he burns the private key.

But why think about it, we feel anxious because he can sell his BTC at once, even better, because at the same time the price will drop and we have the opportunity to buy at a low price.

They already own a lot of Bitcoin as a result of regularly purchasing Bitcoin, which means their company is already profiting a lot from those Bitcoin holdings. The amount of their base Bitcoin holdings you mentioned is the wrong, because you said their Bitcoins are 45,000 thousand. Instead, it would be 450,000 (which was last week). They have currently profit 6120 bitcoins from their base bitcoin holdings. As they have disclosed their profit amount according to last week's bitcoin holdings which will increase further in the this week.
Maybe the purpose of increasing his bitcoin reserves is to buy bitcoins. MichaelSeller has published a framework where he wants to earn $81 trillion from the USA's Bitcoin reserves.

On a very much related note....back in 2015-17 I would never have thought bitcoin would make its way into the mainstream press, and certainly not become as popular a topic of investment as it has today.  This is from today's Wall Street Journal:




So I guess big investors like the convertible bonds, as they don't have to actually do something as wild & crazy as owning bitcoin outright or buying MSTR common stock, which would put them last in line for asset recovery in case of bankruptcy.  Sure, whoever's buying the bonds is simply gambling on an indirect bitcoin play, but at least there's massive interest in it these days.

I interpreted the announcement as merely the other side of the transaction.

I don't know the exact price that these particular convertible bonds would have had been issued, but let's just say that that they are convertible upon a 30% BTC price increase, so then if they had been converted into shares at $106.6k-ish, then they may well would have had been first issued at around $82k, so then when they were issued, MSTR bought the bitcoin with the $1.05 billion that they received from issuing the bond, and they already went through the whole calculations that they are able to buy the $1.05 billion of BTC and already accounting that the MSTR shares would be issued either upon a 30% price raise in BTC, which ended up being $106.6k and so the quantity of shares that are issued may well be issued in such a way that MSTR already got the BTC at $82k an they are issuing the quantity of shares at some agreed upon amount that ends up being the dollar value of the MSTR shares.. even though MSTR got the BTC at a 30% lesser price.   Alternatively, if the BTC price had not gone up at least 30% from the issuance price, then the the $1.05 billion debt would have had been paid off in 5 years at a rate of 0.8% per annum.   

I recognize that that I am not really answering with the exact math, and you did not state your exact math either, since you seem to be presuming that the quantity of shares would exactly reflect the 30% appreciation in BTC price, which is not an unfair presumption, since the enticement for the person buying the convertible bonds would be that they would end up getting 30% profits as long as the BTC price went up 30%, so maybe the answer is that the issued shares end up being in 30% dollar value, but MSTR still has whatever BTC they bought for 30% less..so MSTR still has more bitcoin, and in the end, I am talking a bit out of my ass because I am not sure how those numbers show on the books, yet I have no problem accepting MSTR's claim that the whole transaction (both sides of it) are accretive, so they already proclaimed that the end result is that MSTR (and per share) they get more bitcoin per share by going through such transaction.. and then they no longer have the debt when they finish the second half of the transaction (the conversion part).  Maybe someone with better accounting skills can chime in, since I feel that I did not answer your question, since I am just saying that it is accretive because MSTR says that it is and because if it was not accretive, MSTR would not be claiming and someone (besides us dummies) would have had noticed.       What kind of a non-answer is that?

Poker Player yes, presumably it is dilutive. But is is far more complex than that because dilution at first glance sounds like something bad in the eyes of existing holders. But since the goal of MSTR is clearly stated (I think it was 1,000,000 BTC), which is that they want to become a global bitcoin bank, I am sure that the issuance of those convertible notes is in conformity with the vast majority of shareholder intentions. Proof for this alone is that the goal is clearly stated. If someone wasn't in consent with that strategy to finance further bitcoin purchases via the issuance of convertible notes, they could simply sell their shares.

Since bitcoin is unconditionally scarce, the expansion of their holdings carries most likely more value than the dilution in shares would bear cost.

Now it must be considered that some of the convertible notes work like options. If the MSTR share price is above the conversion price of the bond/note, holders would usually convert into equity. If at maturity the conversion price is below the share price, holders will take back their debt (or extend/refresh the holding period of the convertible). It is a tool that can either in a self-enforcing way fuel the expansion exponentially because bitcoin's price keeps climbing, notes will be converted into equity, but since the price keeps climbing, MSTR will be able to issue more notes and leverage against their value increased equity/bitcoin holdings.

But MSTR has been using capped call transactions. In very simple terms this means they protect themselves against a high conversion rate of convertible note holders when the price goes beyond the conversion price as that is the point when note holders have an incentive to convert. MSTR buys call options in their own shares and if the conversion price is exceeded, MSTR makes gains from their options. With those gains they buy back their own shares and mostly reducing, or in rare cases eliminating the dilutive effect of a certain branch of convertible notes.

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Add note:
This is the decisive point in regards to the strategy MSTR is pursuing. But as you pointed out, they rise in unison and that is why their strategy so far has worked like a charm!

If I understand you correctly, I mostly had the idea correct except that I was using the BTC price, which is largely irrelevant, except that he is buying BTC with whatever convertible bonds that he creates based on the MSTR share price at the time of the creation of the convertible bond.

So the essence is that he issues the debt based on MSTR share prices (which ends up being a dollar price), buys the BTC, then pays the debt in dollars based on the share prices going up to the 30% additional amount (or whatever happens to be the agreed percentage of price appreciation).  I am pretty sure I understood that he buys BTC but he is paying back in dollars, and so that is why the whole situation ends up being accretive rather than dilutive.  You seem more informed of the intricacies regarding how to explain it as compared with me, and maybe it will start to sink in with me after a while..

I know that a lot of folks intuitively think about debt in terms of  BTC as collateral or some  kind of a problematic way of using debt, so then they hardly have any clue about how MSTR is employing debt and so they keep proclaiming how crazy ass Saylor is and sooner or later he is going to end up like Sam Bankman Fried or the guys from Celsius, or the guys from 3AC.. etc etc etc... but those guys were playing around with BTC and leverage.. but they didn't have any BTC and they were selling BTC to cover their over representation of their various assets... so freuqently people will think about the use of debt in those kinds of leveraged ways.


I am pretty sure that what Saylor is doing is not dilutive because he buys BTC with debt that is issued in dollars and payable in dollars, so whatever Saylor is doing continues to add BTC per share, even though more MSTR shares are issued at the end of the convertible bond period...so all shares have more BTC per share, even though each time Saylor issues more convertible bonds (and shares) the newly acquired BTC are spread through the whole company, including already existing shares and the new ones that are issued still amounting to more BTC per share.


This all sounds correct, except for the dilutive part... but I am not going to argue.. since I don't really know beyond what I had already posted.

With the U.S. considering a Bitcoin reserve, the hodl is certain on this one. We are winning!



Source link - https://x.com/saylor/status/1882876201938948233