in all fairness, their assets (bitcoin holdings) represent intrinsic value, and that is being reflected in the share price---just like it would be in a bitcoin ETF.

those holdings aren't reflected in earnings, obviously. any public company that invests in bitcoin is going to have the same skewed P/E dynamics. if bitcoin treasuries become commonplace, we're gonna have to rethink the usefulness of P/E.

in all fairness, their assets (bitcoin holdings) represent intrinsic value, and that is being reflected in the share price---just like it would be in a bitcoin ETF.

those holdings aren't reflected in earnings, obviously. any public company that invests in bitcoin is going to have the same skewed P/E dynamics. if bitcoin treasuries become commonplace, we're gonna have to rethink the usefulness of P/E.

A couple of very interesting tweet from Micheal Saylor:

Michael Saylor (@michael_saylor) Tweeted:
https://twitter.com/michael_saylor/status/1337556620839165952?s=20

https://twitter.com/michael_saylor/status/1337556890742624259?s=20

This is a weird statement in my opinion. Who is the recipient of this message? The public? The regulators?

Oh, speaking of regulators: they are a weird bunch of people.


https://twitter.com/gaborgurbacs/status/1336096995287715840?s=20

I think MicroStrategy is walking on a fine line. I don’t know if the first action will be taken by regulators of the shareholders, even assuming they can do anything with the 33% of voting powers.

Anyway it will be interesting when BTC moons and the total BTC investment will be more than 40% of total assets.

PE ratio is not a metric relevant to valuing a bond investment. 

We view our bitcoin holdings as long-term holdings and we do not plan to engage in regular trading of bitcoin or to
hedge or otherwise enter into derivative contracts with respect to our bitcoin holdings, though we may sell bitcoins in
future periods as needed to generate cash for treasury management and other general corporate purposes. We have not
targeted any specific amount of bitcoin holdings, and we will continue to monitor market conditions in determining
whether to conduct debt or equity financings to purchase additional bitcoin.

As of February 8, 2021, we held approximately 71,079 bitcoin that were acquired at an aggregate purchase price of
$1.145 billion and an average purchase price of approximately $16,109 per bitcoin, inclusive of fees and expenses.

Business Overview
MicroStrategy pursues two corporate strategies in the operation of its business. One strategy is to grow our enterprise
analytics software business and the other strategy is to acquire and hold bitcoin.

...

We believe that our bitcoin strategy is complementary to our analytics software and services business, as we believe
that our bitcoin and related activities in support of the bitcoin network enhance awareness of our brand and can provide
opportunities to secure new customers for our analytics offerings. We are also exploring opportunities to apply bitcoin
related technologies such as blockchain analytics into our software offerings.

• Fluctuations in the price of bitcoin may significantly influence the market price of our class A common stock.
• Our historical financial statements do not reflect the potential variability in earnings that we may experience in the
future relating to bitcoin holdings.
• Changes in securities regulation may adversely impact the market price of our class A common stock.
• Our bitcoin holdings could subject us to regulatory scrutiny.
• Due to the unregulated nature and lack of transparency surrounding the operations of many bitcoin trading
venues, they may experience fraud, security failures or operational problems, which may adversely affect the value
of our bitcoin.
• The price of bitcoin may be influenced by regulatory, commercial, and technical factors that are highly uncertain.
• The concentration of our bitcoin holdings enhances the risks inherent in our bitcoin acquisition strategy.
• Our bitcoin holdings are less liquid than our existing cash and cash equivalents and may not be able to serve as a
source of liquidity for us to the same extent as cash and cash equivalents.
• If we or our third-party service providers experience a security breach or cyberattack and unauthorized parties
obtain access to our bitcoin, we may lose some or all of our bitcoin and our financial condition and results of
operations could be materially adversely affected.
• The loss or destruction of a private key required to access our bitcoin may be irreversible. If we are unable to access
our private keys or if we experience a cyberattack or other data loss relating to our bitcoin, our financial condition
and results of operations could be materially adversely affected.
• Regulatory change reclassifying bitcoin as a security could lead to our classification as an “investment company”
under the Investment Company Act of 1940 and could adversely affect the market price of bitcoin and the market
price of our class A common stock.

Microstrategy is at it again: issuing debt to buy bitcoin:

1/ MicroStrategy has announced a $600M convertible bond raise in order to buy even more Bitcoin

How does this compare to their previous offering?
And is this their last?
2/ First, a convert bond starts as a bond then "converts" to equity. The company pays lower interest rates b/c of this potential conversion. Aka the company will pay for it later w/ equity dilution. A company will choose this route if they have bad credit or expect high growth.

3/ In Dec 2020, MSTR announced their first convert bond offering for the explicit purpose of buying Bitcoin. Citi immediately downgraded MSTR to a “sell” recommendation. The market had a much more bullish take

4/ Investor appetite was so strong that MSTR increa
sed the offering from $400M to $550M w/ the option for another $100M. All of this was filled for a total $650M offering

 5/ MSTR also priced their bonds insanely low. Interest was 0.75% yr. Payments were ~$4Myr for a company w/ an operating income of ~$40M. That's 10x coverage. 2x is considered strong

6/ Saylor went even further than this aggressive pricing by giving themselves the option to settle the bond in shares or pay out in cash. The bond was struck for $398 per share while the stock was at $289. A 35% premium to investors

7/ MSTR has now announced their new offering of $600M converts w/ a $90M increase. Pricing is still TBD but it isn’t hard to imagine it will be in line w/ the last offering. Will we even see another upsize in the offering given Bitcoin’s continuous rising price?

8/ Why do investors remain excited? MSTR has no debt, apart from the $650M note. They can handle more given a) their operating income and b) their balance sheet has more than doubled from their Bitcoin holding - from $1.1B to $3.4B
9/ MSTR owns more BTC than any other operating company, and it gives it a scarcity value above the value of the core business and BTC holdings.

10/ To many institutional investors, it is *the* company you want to invest in for an “almost free call option on Bitcoin”

MicroStrategy and Bitcoin: the Mother of All Fat Tails? - Miller Value Partners
Bill Miller IV on the latest opportunity in a procyclically positioned income strategy.
https://millervalue.com/4q20-income-strategy-letter/

11/ Tesla’s addition of Bitcoin to their balance sheet is helping normalize corps holding Bitcoin as a reserve, but MSTR is the only public company actively taking out debt to acquire more Bitcoin

 
12/ And, per their “Bitcoin Acquisition Strategy” in their 10K, they have no plans to stop. For the foreseeable future, they will use excess cash flows and debt to acquire more and more Bitcoin

13/ TL;DR: MSTR remains the only public company on the market continuing to take out debt to acquire more Bitcoin. Their pricing of these bonds and rising stock price have shown their success in this strategy. They won’t be stopping anytime

Apparently, they completed the sale of their convertible bond:

Please note that they allocated 14 days to perform the sale, but only one day was enough.

This could explain the price action, either or they already bought 1.05 Billion, or they are going to buy this soon!

His company recently held a Summit on Bitcoin for Corporations attended by thousands of companies representatives.