Vinanz (BTC), and probably all the others, seem to be copying the US company Microstrategy. MSTR stock is at a premium to their bitcoin holdings. When bitcoin goes up, so does MSTR. MSTR then issues new shares to buy bitcoin with. In principle there should be some positive effect on the price of bitcoin, but in practice there's probably only a temporary effect, and that happens when MSTR discloses a plan to raise capital for buying bitcoin. The bitcoin buying is also funded by convertible debt. The obvious question is, what happens if or when the price of bitcoin goes down a lot.
I don't think you have to be an emeritus professor of finance to see this, but anyway, AI tells me, "David Krause, emeritus professor of finance at Marquette University, has been critical of MicroStrategy’s Bitcoin-heavy strategy. In a Cointelegraph article republished on TradingView, he warned that a sharp drop in Bitcoin’s price could erode shareholder equity, jeopardize debt repayments, and potentially lead to financial distress or bankruptcy. He called the strategy “inappropriate” for a corporate treasury, emphasizing that such assets should be liquid and low-risk." The article is reproduced here https://www.tradingview.com/news/cointelegraph:8ec8e9c61094b:0-microstrategy-s-bitcoin-debt-loop-stroke-of-genius-or-risky-gamble/ , but it gives a lot of space to pro-Microstrategy arguments that readers might not find entertaining.
A long term chart of MSTR (on Google) looks interesting. Some price points:
$11.56, 15 May 2020
$389.69 now
$9.31, 19 March 1999
>$300, in March or April 2000 (too short to get an exact reading)
$2.63, 6 April 2001
MSTR still has a software business, and back in the ’90s, they focused on data mining and business intelligence. It looks like the stock was late to the Dotcom boom because their enterprise analytics had no particular link to the Internet.
‘Genetically mutilated cauliflowers’ that trumps everything so far! Literally in tears. My partner loves these podcasts even though she has no idea what you are talking about. I used to have to go off and listen to them privately. It might well be legal but do they have no bar left to lower?
Vinanz (BTC), and probably all the others, seem to be copying the US company Microstrategy. MSTR stock is at a premium to their bitcoin holdings. When bitcoin goes up, so does MSTR. MSTR then issues new shares to buy bitcoin with. In principle there should be some positive effect on the price of bitcoin, but in practice there's probably only a temporary effect, and that happens when MSTR discloses a plan to raise capital for buying bitcoin. The bitcoin buying is also funded by convertible debt. The obvious question is, what happens if or when the price of bitcoin goes down a lot.
I don't think you have to be an emeritus professor of finance to see this, but anyway, AI tells me, "David Krause, emeritus professor of finance at Marquette University, has been critical of MicroStrategy’s Bitcoin-heavy strategy. In a Cointelegraph article republished on TradingView, he warned that a sharp drop in Bitcoin’s price could erode shareholder equity, jeopardize debt repayments, and potentially lead to financial distress or bankruptcy. He called the strategy “inappropriate” for a corporate treasury, emphasizing that such assets should be liquid and low-risk." The article is reproduced here https://www.tradingview.com/news/cointelegraph:8ec8e9c61094b:0-microstrategy-s-bitcoin-debt-loop-stroke-of-genius-or-risky-gamble/ , but it gives a lot of space to pro-Microstrategy arguments that readers might not find entertaining.
A long term chart of MSTR (on Google) looks interesting. Some price points:
$11.56, 15 May 2020
$389.69 now
$9.31, 19 March 1999
>$300, in March or April 2000 (too short to get an exact reading)
$2.63, 6 April 2001
MSTR still has a software business, and back in the ’90s, they focused on data mining and business intelligence. It looks like the stock was late to the Dotcom boom because their enterprise analytics had no particular link to the Internet.
‘Genetically mutilated cauliflowers’ that trumps everything so far! Literally in tears. My partner loves these podcasts even though she has no idea what you are talking about. I used to have to go off and listen to them privately. It might well be legal but do they have no bar left to lower?