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- FilbyFilby
  ·2024-12-16
  From memory Trump called Bitcoin a scam. Wonder what changed his mind? Pretty sure he didn't 'study' it... Perhaps soliciting votes?
  EXCLUSIVE: Eric Trump Declares Bitcoin The Future, Details Tax-Free Crypto Goals For Trump Presidency
  Eric Trump, son of the President-elect and executive vice president of the Trump Organization, is solidifying his stance on cryptocurrency as a cornerstone of his father's incoming administration.
  EXCLUSIVE: Eric Trump Declares Bitcoin The Future, Details Tax-Free Crypto Goals For Trump Presidency
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- FilbyFilby
  ·2024-11-29
  Nvidia and Rocketlab for me
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- FilbyFilby
  ·2024-11-29
  Microstrategy is now tied to Bitcoin so predicting the Microstrategy price requires predicting the price of Bitcoin.
  MicroStrategy: Shorts Are Playing With Fire
  SummaryCitron Research is shorting MicroStrategy, but I believe the stock's bullish technicals make a sell rating unwarranted; I rate it a hold.Daily and weekly chart analyses show strong uptrends wit
  MicroStrategy: Shorts Are Playing With Fire
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- FilbyFilby
  ·2024-11-21
  This will end badly. Unsustainable.
  Sorry, this post has been deleted
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- FilbyFilby
  ·2024-11-20
  Microstrategy is all in on Bitcoin. When Bitcoin runs out of new investors they will both fall spectacularly. Would love to own a five year short on both.
  MicroStrategy Could Be A Multi-Trillion Dollar Company
  MicroStrategy is effectively Bitcoin's only investment bank.MSTR's unique strategy involves issuing securities backed by BTC, creating significant value through a spread between BTC's CAGR and fiat cost of capital.Its BTC purchases are best thought of as revenue, and its rock bottom costs of capital are best thought of as costs of revenue.MSTR's market cap could potentially reach $690 billion to $3 trillion, driven by its unparalleled role in the BTC ecosystem and virtually impregnable moat of owning 1.3% of all BTC.Joe Raedle Frankly, I got MicroStrategy wrong. I've been heavily long and consistently bullish on MSTR in my Seeking Alpha articles, but I didn't fully grasp the enormity of what they were doing. There haven't been many bullish
  MicroStrategy Could Be A Multi-Trillion Dollar Company
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Wonder what changed his mind? Pretty sure he didn't 'study' it... Perhaps soliciting votes?","listText":"From memory Trump called Bitcoin a scam. Wonder what changed his mind? Pretty sure he didn't 'study' it... Perhaps soliciting votes?","text":"From memory Trump called Bitcoin a scam. Wonder what changed his mind? Pretty sure he didn't 'study' it... Perhaps soliciting votes?","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/382200489922976","repostId":"2491579693","repostType":2,"repost":{"id":"2491579693","kind":"highlight","pubTimestamp":1734276101,"share":"https://ttm.financial/m/news/2491579693?lang=&edition=fundamental","pubTime":"2024-12-15 23:21","market":"us","language":"en","title":"EXCLUSIVE: Eric Trump Declares Bitcoin The Future, Details Tax-Free Crypto Goals For Trump Presidency","url":"https://stock-news.laohu8.com/highlight/detail?id=2491579693","media":"Benzinga","summary":"Eric Trump, son of the President-elect and executive vice president of the Trump Organization, is solidifying his stance on cryptocurrency as a cornerstone of his father&#39;s incoming administration.","content":"<html><body><div itemprop=\"articleBody\" itemscope=\"\" itemtype=\"https://schema.org/Article\"><div><p><strong>Eric Trump</strong>, son of the President-elect and executive vice president of the Trump Organization, is solidifying his stance on cryptocurrency as a cornerstone of his father's incoming administration.</p>\n<p>Speaking exclusively with <strong>Benzinga</strong>‘s <strong>Bibhu Pattnaik</strong>, Eric emphasized plans to work alongside his father, <strong>Donald Trump</strong>, to position the United States as the global hub for cryptocurrency. </p>\n<p>During his remarks, Eric criticized the current administration's handling of crypto, accusing regulators like SEC Chair <strong>Gary Gensler</strong> of waging a \"holy war\" against the industry. </p>\n<p>“The crypto community in America was under total attack by Gary Gensler and so many other people. Biden was nowhere to be found. Kamala [Harris] was nowhere to be found. They didn’t understand what crypto was. And frankly, they waged holy war against the community. And then all of a sudden my father comes in,” Eric told Benzinga.</p>\n<p>He underscored Donald Trump's support for crypto, citing his appearance at a Bitcoin conference as a pivotal moment for the industry. </p>\n<p>\"My father wants to make America the crypto capital of the world. And he’s been very transparent about that. And the crypto community loves him in America. You know that as well as anybody. He spoke at the first Bitcoin conference and said ‘I stand behind you. I stand behind this community. I love this community,” Eric said. </p>\n<p>Outlining a vision of a pro-crypto presidency with \"sane regulation\" and possible tax incentives for crypto investors, Eric added, “I think there should be sane regulation. You know, and that’s what everybody wants. We’re going to make crypto great. My father said, ‘I’m going to have it on the balance sheet of the United States. I’m going to try and make some of it tax-free under certain parameters.”</p>\n<p>Eric expressed optimism about Bitcoin and other digital currencies, describing himself as \"very bullish.\" </p>\n<p>While he declined to make specific predictions about Bitcoin's future value, he highlighted his own holdings, which include <strong>Bitcoin</strong>, <strong>Ethereum</strong>, <strong>Solana</strong>, and <strong>Sui</strong>. </p>\n<p>Also Read: EXCLUSIVE: Eric Trump Calls Elon Musk ‘Albert Einstein Of Our Time,’ Says Tesla CEO Will Help Build ‘A Stronger America’</p>\n<p>\"I love Bitcoin,\" he said, adding that blockchain technology has the potential to outperform traditional banking, which he described as \"antiquated\" and inefficient.</p>\n<p>“I love Bitcoin. And listen, I’m not going to predict it because I think it’s a really bad thing if somebody in my spot starts predicting where something’s going to go. But I will say I’m very bullish on Bitcoin and I’m bullish on crypto,” Eric said. </p>\n<p>He stressed the need for decentralized finance (DeFi) to modernize outdated financial systems, calling it a necessary step for economic innovation. \"Modern banking has left 99% of people behind,\" Eric said, championing blockchain as a transformative technology.</p>\n<p>“I think that modern banking is antiquated as hell. I think modern banking has been cool to a lot of people. I think modern banking has left 99% of the people behind. It’s slow. It’s inefficient. It’s costly. And there’s nothing that’s done in modern banking that can’t be done better on blockchain. And we’re all in the crypto world. I think we’re going to do very well in the crypto world. And I think you’re going to have a great ally,” Eric said. </p>\n<p>“I saw the weaponization of government firsthand in the United States. And frankly, you know, what they did to the Bitcoiners is very much the same thing that they did to our family. They waged war on them for absolutely no reason whatsoever other than to undermine an industry that for some reason that they didn’t like. So no doubt there is no support, less support for the previous government. And I think a lot of people saw that. I think people saw what they were doing to us. And I think people saw what they were doing to that community. And they moved to my father’s face,” Eric further added. </p>\n<p>As the Trump campaign gears up for a potential 2024 presidential bid, cryptocurrency appears set to play a significant role in shaping the platform. </p>\n<p>Eric's comments not only highlight his commitment to the industry but also signal how the Trump family aims to leverage crypto in future political and economic policies.</p>\n<p>Read Next</p>\n<p>Trump Aims To Make US ‘Crypto Capital Of The Planet’: ‘We’ll Get It Done’</p>\n<p>Image: Wikimedia Commons</p></div>Market News and Data brought to you by Benzinga APIs<p>© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.</p></div></body></html>","source":"Benzinga","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>EXCLUSIVE: Eric Trump Declares Bitcoin The Future, Details Tax-Free Crypto Goals For Trump Presidency</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; 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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nEXCLUSIVE: Eric Trump Declares Bitcoin The Future, Details Tax-Free Crypto Goals For Trump Presidency\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-12-15 23:21 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.benzinga.com/markets/cryptocurrency/24/12/42499633/exclusive-eric-trump-declares-bitcoin-the-future-details-tax-free-crypto-goals-for-trump-presidency><strong>Benzinga</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Eric Trump, son of the President-elect and executive vice president of the Trump Organization, is solidifying his stance on cryptocurrency as a cornerstone of his father's incoming administration.\n...</p>\n\n<a href=\"https://www.benzinga.com/markets/cryptocurrency/24/12/42499633/exclusive-eric-trump-declares-bitcoin-the-future-details-tax-free-crypto-goals-for-trump-presidency\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"https://www.benzinga.com/files/images/story/2024/12/15/2048px-Eric-Trump-50760331841.jpeg","relate_stocks":{"BK4585":"ETF&股票定投概念","BK4594":"比特币ETF概念","BK4588":"碎股","BK4601":"加密货币现货ETF"},"source_url":"https://www.benzinga.com/markets/cryptocurrency/24/12/42499633/exclusive-eric-trump-declares-bitcoin-the-future-details-tax-free-crypto-goals-for-trump-presidency","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2491579693","content_text":"Eric Trump, son of the President-elect and executive vice president of the Trump Organization, is solidifying his stance on cryptocurrency as a cornerstone of his father's incoming administration.\nSpeaking exclusively with Benzinga‘s Bibhu Pattnaik, Eric emphasized plans to work alongside his father, Donald Trump, to position the United States as the global hub for cryptocurrency. \nDuring his remarks, Eric criticized the current administration's handling of crypto, accusing regulators like SEC Chair Gary Gensler of waging a \"holy war\" against the industry. \n“The crypto community in America was under total attack by Gary Gensler and so many other people. Biden was nowhere to be found. Kamala [Harris] was nowhere to be found. They didn’t understand what crypto was. And frankly, they waged holy war against the community. And then all of a sudden my father comes in,” Eric told Benzinga.\nHe underscored Donald Trump's support for crypto, citing his appearance at a Bitcoin conference as a pivotal moment for the industry. \n\"My father wants to make America the crypto capital of the world. And he’s been very transparent about that. And the crypto community loves him in America. You know that as well as anybody. He spoke at the first Bitcoin conference and said ‘I stand behind you. I stand behind this community. I love this community,” Eric said. \nOutlining a vision of a pro-crypto presidency with \"sane regulation\" and possible tax incentives for crypto investors, Eric added, “I think there should be sane regulation. You know, and that’s what everybody wants. We’re going to make crypto great. My father said, ‘I’m going to have it on the balance sheet of the United States. I’m going to try and make some of it tax-free under certain parameters.”\nEric expressed optimism about Bitcoin and other digital currencies, describing himself as \"very bullish.\" \nWhile he declined to make specific predictions about Bitcoin's future value, he highlighted his own holdings, which include Bitcoin, Ethereum, Solana, and Sui. \nAlso Read: EXCLUSIVE: Eric Trump Calls Elon Musk ‘Albert Einstein Of Our Time,’ Says Tesla CEO Will Help Build ‘A Stronger America’\n\"I love Bitcoin,\" he said, adding that blockchain technology has the potential to outperform traditional banking, which he described as \"antiquated\" and inefficient.\n“I love Bitcoin. And listen, I’m not going to predict it because I think it’s a really bad thing if somebody in my spot starts predicting where something’s going to go. But I will say I’m very bullish on Bitcoin and I’m bullish on crypto,” Eric said. \nHe stressed the need for decentralized finance (DeFi) to modernize outdated financial systems, calling it a necessary step for economic innovation. \"Modern banking has left 99% of people behind,\" Eric said, championing blockchain as a transformative technology.\n“I think that modern banking is antiquated as hell. I think modern banking has been cool to a lot of people. I think modern banking has left 99% of the people behind. It’s slow. It’s inefficient. It’s costly. And there’s nothing that’s done in modern banking that can’t be done better on blockchain. And we’re all in the crypto world. I think we’re going to do very well in the crypto world. And I think you’re going to have a great ally,” Eric said. \n“I saw the weaponization of government firsthand in the United States. And frankly, you know, what they did to the Bitcoiners is very much the same thing that they did to our family. They waged war on them for absolutely no reason whatsoever other than to undermine an industry that for some reason that they didn’t like. So no doubt there is no support, less support for the previous government. And I think a lot of people saw that. I think people saw what they were doing to us. And I think people saw what they were doing to that community. And they moved to my father’s face,” Eric further added. \nAs the Trump campaign gears up for a potential 2024 presidential bid, cryptocurrency appears set to play a significant role in shaping the platform. \nEric's comments not only highlight his commitment to the industry but also signal how the Trump family aims to leverage crypto in future political and economic policies.\nRead Next\nTrump Aims To Make US ‘Crypto Capital Of The Planet’: ‘We’ll Get It Done’\nImage: Wikimedia CommonsMarket News and Data brought to you by Benzinga APIs© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.","news_type":1},"isVote":1,"tweetType":1,"viewCount":305,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":375988433588368,"gmtCreate":1732812137598,"gmtModify":1732813231137,"author":{"id":"4185504823479892","authorId":"4185504823479892","name":"Filby","avatar":"https://community-static.tradeup.com/news/default-avatar.jpg","crmLevel":1,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4185504823479892","authorIdStr":"4185504823479892"},"themes":[],"htmlText":"Nvidia and Rocketlab for me","listText":"Nvidia and Rocketlab for me","text":"Nvidia and Rocketlab for me","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/375988433588368","isVote":1,"tweetType":1,"viewCount":163,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":375892066255176,"gmtCreate":1732811790848,"gmtModify":1732813215544,"author":{"id":"4185504823479892","authorId":"4185504823479892","name":"Filby","avatar":"https://community-static.tradeup.com/news/default-avatar.jpg","crmLevel":1,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4185504823479892","authorIdStr":"4185504823479892"},"themes":[],"htmlText":"Microstrategy is now tied to Bitcoin so predicting the&nbsp;Microstrategy price requires predicting the price of Bitcoin.","listText":"Microstrategy is now tied to Bitcoin so predicting the&nbsp;Microstrategy price requires predicting the price of Bitcoin.","text":"Microstrategy is now tied to Bitcoin so predicting the Microstrategy price requires predicting the price of Bitcoin.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/375892066255176","repostId":"1154834908","repostType":2,"repost":{"id":"1154834908","kind":"news","pubTimestamp":1732789910,"share":"https://ttm.financial/m/news/1154834908?lang=&edition=fundamental","pubTime":"2024-11-28 18:31","market":"us","language":"en","title":"MicroStrategy: Shorts Are Playing With Fire","url":"https://stock-news.laohu8.com/highlight/detail?id=1154834908","media":"Seeking Alpha","summary":"SummaryCitron Research is shorting MicroStrategy, but I believe the stock's bullish technicals make a sell rating unwarranted; I rate it a hold.Daily and weekly chart analyses show strong uptrends wit","content":"<html><head></head><body><h2 id=\"id_3071328920\">Summary</h2><ul style=\"\"><li><p>Citron Research is shorting MicroStrategy, but I believe the stock&#39;s bullish technicals make a sell rating unwarranted; I rate it a hold.</p></li><li><p>Daily and weekly chart analyses show strong uptrends with no resistance, indicating potential for further stock appreciation despite recent pullbacks.</p></li><li><p>Fundamental analysis reveals overvaluation with weak earnings and high P/S and P/B ratios, suggesting long-term risks despite bullish technical signals.</p></li><li><p>Conflicting technical and fundamental signals lead to a hold rating, cautioning shorts about potential near-term bullish momentum before fundamentals reassert.</p></li></ul><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/44a65a39741c3708a2c04ecf88c953fb\" alt=\"MicroStockHub\" title=\"MicroStockHub\" tg-width=\"750\" tg-height=\"474\"/><span>MicroStockHub</span></p><h2 id=\"id_3184934740\">Thesis</h2><p>Citron Research recently announced that they are now shorting MicroStrategy Incorporated (NASDAQ:MSTR) stock as they believe that it is detached from fundamentals. While I also believe the stock is currently overvalued, in my view, Citron Research is playing with fire by shorting the stock as the technicals are overwhelmingly bullish. In the below analysis, I determine that charts, moving averages, and most indicators show that the stock&#39;s outlook is positive and that the recent pullback is a healthy correction in the long run. Note that a monthly analysis has not been provided, as I believe the 2020 to present period is the most relevant due to MicroStrategy&#39;s implementation of its Bitcoin strategy in 2020. In the fundamentals section, I explain my evaluation that MicroStrategy stock is overvalued using the P/S and P/B ratios as well as trends in their earnings and Bitcoin investments. In the long run, the stock may revert to reflecting the fundamentals and could prove Citron Research to be right. However, before that occurs, history has shown that overvalued stocks can become much more overvalued. With highly bullish technicals, history can easily repeat itself with MicroStrategy stock. With the stock significantly overvalued, I cannot recommend buying it at these levels, but with the technicals so strong, I also believe a sell rating is unwarranted at this juncture. Therefore, I initiate coverage at a hold rating.</p><h2 id=\"id_1156402332\">Daily Analysis</h2><h3 id=\"id_2940204203\">Chart Analysis</h3><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/a97dac49f1fbfa9eb6a36d28d0dd76d3\" alt=\"Yahoo Finance\" title=\"Yahoo Finance\" tg-width=\"640\" tg-height=\"348\"/><span>Yahoo Finance</span></p><p>The daily chart is quite a positive one for MicroStrategy as there is no resistance above the stock. The stock is in both a slightly longer-term uptrend and a recent accelerated uptrend. It also has many support levels beneath the stock. The nearest current support would be the accelerated uptrend line that has moved past 400 and is sloping up very quickly. Its sustainability could be in question as its trajectory may be too steep. The next support level is also quite close and is in the mid-380s. In the last week or so, that level has been both resistance and support, making it a highly important zone. Moving down, the mid-320s is also support, as there is a consolidation area that found support at that price level. Although quite distant, we also have support in the mid-270s as that was an upside gap and the slower uptrend line is also nearing that level as well. Other noteworthy items include the fact that the stock has closed an upside gap that I have circled, showing that the stock has corrected as of late, and the bearish engulfing pattern at the peak a few days ago, perhaps indicating that a near term peak is in. Nonetheless, it is hard to argue against the overall bullishness of the daily chart as the stock is in strong uptrends with no resistance in sight.</p><h3 id=\"id_4239491117\">Moving Average Analysis</h3><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/6aaaeb09c88ae46f160b985f2d54c465\" alt=\"Yahoo Finance\" title=\"Yahoo Finance\" tg-width=\"640\" tg-height=\"347\"/><span>Yahoo Finance</span></p><p>There have been no crossovers between the 50-day SMA and the 200-day SMA in the past year, with the 50-day SMA staying on top the entire time, indicating sustained bullishness. The 50-day SMA has recently widened the gap significantly with the 200-day SMA, indicating accelerating bullish momentum in the stock. The stock does trade miles above the 50-day SMA, however, as the 50-day SMA&#39;s support is only at around 240. For the Bollinger Bands, the stock recently broke above the upper band, and so the current pullback is not at all surprising. As volatility expands, the upper band may continue to surge higher, creating more room for the stock to run higher without being overbought. The 20-day midline is the nearest MA support at around 320. Overall, I believe that while the stock may be a bit overbought as it is much higher than its 50-day SMA, there are really no outright bearish indications here to convince me that the near term technicals have turned negative.</p><h3 id=\"id_2938062328\">Indicator Analysis</h3><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/6ff5ea19d6bb172a266a222f7fc0bc7d\" alt=\"Yahoo Finance\" title=\"Yahoo Finance\" tg-width=\"640\" tg-height=\"350\"/><span>Yahoo Finance</span></p><p>The MACD crossed above the signal line earlier this month, a bullish signal. The gap between the lines has narrowed a bit, as indicated by the red histogram, showing that bullishness has been receding a bit as of late. This is not surprising given that the stock is currently in an overbought pullback. The MACD&#39;s run to one year highs also confirms the latest surge in the stock. For the RSI, it is currently at 64.39 having just exited the overbought 70 level. The RSI has held above 50 since mid-September, showing that the bulls are in clear control of the stock. Lastly, for the stochastics, the %K just recently crossed below the %D within the overbought 80 zone, a bearish signal. This again is not surprising given that the stock is undergoing an overbought correction. Note that the stochastics has remained above the 50 level since mid-September and has, in fact, found support at that level multiple times. This indicates that the bulls have been resilient in recent pullbacks, and investors should monitor this indicator closely to see if it bounces from this level again. As a whole, I would say that these indicators were mainly positive in the longer term, as the recent bearish indications are merely reflecting the stock&#39;s healthy pullback.</p><h3 id=\"id_3704937246\">Takeaway</h3><p>The short-term technical outlook for MicroStrategy is a strong one, as all three analyses indicate that the stock could run further in the near future. The chart shows that the stock remains in both a slower and an accelerated uptrend, while the MAs show accelerating bullish momentum. Lastly, for the indicators, as discussed above, there were key bullish signals and while there were some near-term bearish signals, they merely reflect the recent healthy pullback in the stock.</p><h2 id=\"id_629513900\">Weekly Analysis</h2><h3 id=\"id_3203039374\">Chart Analysis</h3><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/c358683c3cb5dc6c6c9bd0528030d9d5\" alt=\"Yahoo Finance\" title=\"Yahoo Finance\" tg-width=\"640\" tg-height=\"349\"/><span>Yahoo Finance</span></p><p>Note that the above chart is in a log scale to better reflect the last few years of trading history in MicroStrategy stock. The weekly chart is also a highly positive one for the stock, as it has now broken above the upper channel line and is in an accelerated uptrend. The upward channel has been in effect since early 2023 and in October this year, the stock broke above it, an indication of strength. The nearest support level would be at a gap in the low 270s. This is basically the same gap as in the daily analysis, but being on the weekly chart further adds to its significance. The next support level would be the upper channel line, and it has just moved past 210. The other two support zones are very distant due to the log scale, but I believe are still noteworthy. The lower channel line is approaching 130 and there is also a support level at 110 as that price level was major resistance in 2021 and is also at an upside gap formed earlier this year, making it a very significant area. Overall, I believe there is not much to complain about here, as there are no bearish indications to be seen.</p><h3 id=\"id_869051729\">Moving Average Analysis</h3><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/6f070a051a11b56dd0f28b36af2cb664\" alt=\"Yahoo Finance\" title=\"Yahoo Finance\" tg-width=\"640\" tg-height=\"349\"/><span>Yahoo Finance</span></p><p>The 13-week SMA had a bullish crossover with the 26-week SMA earlier this year where the 13-week SMA just dipped below the 26-week SMA and bounced back very quickly. The gap between the SMAs has expanded rapidly lately as the stock has surged, indicating accelerating bullish momentum. Again, the stock trades far above the SMAs, showing that it could be overbought with the 13-week SMA&#39;s support at only 237. For the Bollinger Bands, the stock remains above the upper band, showing that it is indeed still overbought in the longer term time frame. Therefore, a further pullback in the stock is definitely not out of the question and could, in fact, be healthy for the stock&#39;s long-term trend. The 20-week midline is only at around 206, but its support is nearer than the 26-week SMA. From my analysis, there is nothing wrong with MicroStrategy stock in the long term, even if it continues its recent pullback. The MAs are solidly bullish, and the stock just needs a healthy correction.</p><h3 id=\"id_3635207665\">Indicator Analysis</h3><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/7357997dbd5ee7515b536790b6544d8d\" alt=\"Yahoo Finance\" title=\"Yahoo Finance\" tg-width=\"640\" tg-height=\"348\"/><span>Yahoo Finance</span></p><p>The MACD had a bullish crossover with the signal line back in late September, and the stock has surged since then. The gap between the lines continues to expand as demonstrated by the green histogram and again shows accelerating bullish momentum. Like in the daily analysis, the weekly MACD&#39;s run to 5-year highs, confirms the recent surge in the stock. For the RSI, it is currently above the overbought 70 zone as it is at 80.41. There is some slight negative divergence with the RSI here, as the most recent peak fails to surpass the peak earlier this year and the one back in 2021. Since the MACD does confirm the recent run, I believe this divergence signal has less significance and should be taken with a grain of salt. Lastly, for the stochastics, the %K has crossed below %D within the overbought 80 zone in October, a bearish indication. However, both lines have generally remained in or near that zone since the bearish crossover, showing that bullishness has been sustained despite the negative signal. From my analysis, these weekly indicators are slightly more mixed in their signalling as there are both bullish and bearish indications here, but I believe the MACD&#39;s confirmation of the bull run should give investors some peace of mind.</p><h3 id=\"id_128086230\">Takeaway</h3><p>Overall, I would say that the long-term technical outlook for MicroStrategy is also positive, as the vast majority of signals are bullish. The charts show that the stock has broken out of an upward channel and is now in an accelerated uptrend, while the MAs once again show accelerating bullish momentum. For the indicators, there were mixed signals that show some uncertainty, but as discussed above, I would consider the MACD&#39;s bullish confirmation as the most important signal.</p><h2 id=\"id_3812953207\">Fundamentals &amp; Valuation</h2><h3 id=\"id_1136376142\">Earnings</h3><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/a40d220b25454bd5145b5ca29a578107\" alt=\"Data by YCharts\" title=\"Data by YCharts\" tg-width=\"635\" tg-height=\"537\"/><span>Data by YCharts</span></p><p>MicroStrategy reported their Q3 earnings back in late October and showed weak operating results. They reported revenues of $116.1 million, down 10.3% YoY and a GAAP Net Loss of $1.72 per share. Both figures missed expectations with revenue missing by $5.38 million and EPS missing by $1.60. As you can see in the charts above, revenue is at weak levels compared to past years and EPS is on a worrying trajectory. Of course, these operational results have taken a back seat as the focus is firmly on the company&#39;s Bitcoin investments. MicroStrategy reported a 5.1% &#34;BTC Yield&#34; KPI in the quarter and projected a target annual BTC Yield of 6-10% from 2025 to 2027. It also announced a $21 billion equity offering at market price and an additional raising of $21 billion from fixed-income securities to fund its Bitcoin investments. As of this report, they are holding 252,220 Bitcoins, translating into a current total market value of $23.5 billion. The company has made significant purchases since then with the most recent purchases occurring last week, where they purchased an additional 55,000 Bitcoins. As of this latest Sunday, they hold 386,700 Bitcoins, translating into a current total market value of $36.1 billion. From the chart above, you can see that the company&#39;s book value has soared in the past two years along with the bull run in Bitcoin itself.</p><h3 id=\"id_372276589\">Valuation</h3><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/8930a8daabd7c2a06eaa49441ed3feeb\" alt=\"Data by YCharts\" title=\"Data by YCharts\" tg-width=\"635\" tg-height=\"491\"/><span>Data by YCharts</span></p><p>In my view, it is clear that MicroStrategy is overvalued at current levels. Earnings are now negative, and so a P/E analysis would be irrelevant. The P/S ratio is currently at 167, dropping slightly from its all-time highs of over 180 recently. The P/B ratio is currently at 24 and is at a five-year-high, excluding the 2021-2022 spike. As I said earlier, of course, the focus has shifted to Bitcoin, but the company&#39;s current market cap of $76 billion shows that its Bitcoin holdings of $36.1 billion are just a portion of the value. Therefore, the P/S should still be a relevant measure of value for the stock and so with revenues near five-year lows, I believe the current P/S ratio is unjustified. For the P/B ratio, MicroStrategy started to buy Bitcoin back in 2020 and has been increasing their holdings since then, which deserves a premium, but the P/B ratio is now at approximately 2 times the five-year average, excluding the 2021 spike. Despite their aggressive strategy, I, personally, find the P/B ratio of over 24 to be too rich. From my analysis of the P/S and P/B ratios, I believe the stock is overvalued at current levels. For MicroStrategy stock, Seeking Alpha currently has an F valuation rating for the P/S ratio and a D- rating for the P/B ratio, confirming my evaluation.</p><h2 id=\"id_1452635653\">Conclusion</h2><p>From the above analysis, it is clear that the technicals differ highly with the fundamentals on their outlooks for the stock. The vast majority of technical indications were bullish as the chart showed the stock is in accelerated uptrends while MAs show strong bullish momentum. While indicators were a bit more mixed overall, there were key signals of strength that confirm the recent surge in the stock. For the fundamentals, with revenue being very sluggish, I find the stock to be overvalued in terms of the P/S ratio and while the increasingly large Bitcoin pile deserves a P/B expansion, I believe the ratio has gone too far currently as it is at an eye-watering level of 24. I therefore conclude that the stock is significantly overvalued at current levels. While the stock could revert to reflecting its fundamentals in the long run and prove Citron Research to be right in the long run, in the near term, I believe the stock could have room to run due to the technicals being heavily in MicroStrategy&#39;s favour. With conflicting technical and fundamental signals, I initiate the stock at a hold rating, but I believe shorts are at a high risk of being burned before their predictions come true.</p></body></html>","source":"lsy1728464409321","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>MicroStrategy: Shorts Are Playing With Fire</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nMicroStrategy: Shorts Are Playing With Fire\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-11-28 18:31 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4740856-microstrategy-shorts-are-playing-fire-technical-analysis><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummaryCitron Research is shorting MicroStrategy, but I believe the stock's bullish technicals make a sell rating unwarranted; I rate it a hold.Daily and weekly chart analyses show strong uptrends ...</p>\n\n<a href=\"https://seekingalpha.com/article/4740856-microstrategy-shorts-are-playing-fire-technical-analysis\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"MSTR":"MicroStrategy"},"source_url":"https://seekingalpha.com/article/4740856-microstrategy-shorts-are-playing-fire-technical-analysis","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1154834908","content_text":"SummaryCitron Research is shorting MicroStrategy, but I believe the stock's bullish technicals make a sell rating unwarranted; I rate it a hold.Daily and weekly chart analyses show strong uptrends with no resistance, indicating potential for further stock appreciation despite recent pullbacks.Fundamental analysis reveals overvaluation with weak earnings and high P/S and P/B ratios, suggesting long-term risks despite bullish technical signals.Conflicting technical and fundamental signals lead to a hold rating, cautioning shorts about potential near-term bullish momentum before fundamentals reassert.MicroStockHubThesisCitron Research recently announced that they are now shorting MicroStrategy Incorporated (NASDAQ:MSTR) stock as they believe that it is detached from fundamentals. While I also believe the stock is currently overvalued, in my view, Citron Research is playing with fire by shorting the stock as the technicals are overwhelmingly bullish. In the below analysis, I determine that charts, moving averages, and most indicators show that the stock's outlook is positive and that the recent pullback is a healthy correction in the long run. Note that a monthly analysis has not been provided, as I believe the 2020 to present period is the most relevant due to MicroStrategy's implementation of its Bitcoin strategy in 2020. In the fundamentals section, I explain my evaluation that MicroStrategy stock is overvalued using the P/S and P/B ratios as well as trends in their earnings and Bitcoin investments. In the long run, the stock may revert to reflecting the fundamentals and could prove Citron Research to be right. However, before that occurs, history has shown that overvalued stocks can become much more overvalued. With highly bullish technicals, history can easily repeat itself with MicroStrategy stock. With the stock significantly overvalued, I cannot recommend buying it at these levels, but with the technicals so strong, I also believe a sell rating is unwarranted at this juncture. Therefore, I initiate coverage at a hold rating.Daily AnalysisChart AnalysisYahoo FinanceThe daily chart is quite a positive one for MicroStrategy as there is no resistance above the stock. The stock is in both a slightly longer-term uptrend and a recent accelerated uptrend. It also has many support levels beneath the stock. The nearest current support would be the accelerated uptrend line that has moved past 400 and is sloping up very quickly. Its sustainability could be in question as its trajectory may be too steep. The next support level is also quite close and is in the mid-380s. In the last week or so, that level has been both resistance and support, making it a highly important zone. Moving down, the mid-320s is also support, as there is a consolidation area that found support at that price level. Although quite distant, we also have support in the mid-270s as that was an upside gap and the slower uptrend line is also nearing that level as well. Other noteworthy items include the fact that the stock has closed an upside gap that I have circled, showing that the stock has corrected as of late, and the bearish engulfing pattern at the peak a few days ago, perhaps indicating that a near term peak is in. Nonetheless, it is hard to argue against the overall bullishness of the daily chart as the stock is in strong uptrends with no resistance in sight.Moving Average AnalysisYahoo FinanceThere have been no crossovers between the 50-day SMA and the 200-day SMA in the past year, with the 50-day SMA staying on top the entire time, indicating sustained bullishness. The 50-day SMA has recently widened the gap significantly with the 200-day SMA, indicating accelerating bullish momentum in the stock. The stock does trade miles above the 50-day SMA, however, as the 50-day SMA's support is only at around 240. For the Bollinger Bands, the stock recently broke above the upper band, and so the current pullback is not at all surprising. As volatility expands, the upper band may continue to surge higher, creating more room for the stock to run higher without being overbought. The 20-day midline is the nearest MA support at around 320. Overall, I believe that while the stock may be a bit overbought as it is much higher than its 50-day SMA, there are really no outright bearish indications here to convince me that the near term technicals have turned negative.Indicator AnalysisYahoo FinanceThe MACD crossed above the signal line earlier this month, a bullish signal. The gap between the lines has narrowed a bit, as indicated by the red histogram, showing that bullishness has been receding a bit as of late. This is not surprising given that the stock is currently in an overbought pullback. The MACD's run to one year highs also confirms the latest surge in the stock. For the RSI, it is currently at 64.39 having just exited the overbought 70 level. The RSI has held above 50 since mid-September, showing that the bulls are in clear control of the stock. Lastly, for the stochastics, the %K just recently crossed below the %D within the overbought 80 zone, a bearish signal. This again is not surprising given that the stock is undergoing an overbought correction. Note that the stochastics has remained above the 50 level since mid-September and has, in fact, found support at that level multiple times. This indicates that the bulls have been resilient in recent pullbacks, and investors should monitor this indicator closely to see if it bounces from this level again. As a whole, I would say that these indicators were mainly positive in the longer term, as the recent bearish indications are merely reflecting the stock's healthy pullback.TakeawayThe short-term technical outlook for MicroStrategy is a strong one, as all three analyses indicate that the stock could run further in the near future. The chart shows that the stock remains in both a slower and an accelerated uptrend, while the MAs show accelerating bullish momentum. Lastly, for the indicators, as discussed above, there were key bullish signals and while there were some near-term bearish signals, they merely reflect the recent healthy pullback in the stock.Weekly AnalysisChart AnalysisYahoo FinanceNote that the above chart is in a log scale to better reflect the last few years of trading history in MicroStrategy stock. The weekly chart is also a highly positive one for the stock, as it has now broken above the upper channel line and is in an accelerated uptrend. The upward channel has been in effect since early 2023 and in October this year, the stock broke above it, an indication of strength. The nearest support level would be at a gap in the low 270s. This is basically the same gap as in the daily analysis, but being on the weekly chart further adds to its significance. The next support level would be the upper channel line, and it has just moved past 210. The other two support zones are very distant due to the log scale, but I believe are still noteworthy. The lower channel line is approaching 130 and there is also a support level at 110 as that price level was major resistance in 2021 and is also at an upside gap formed earlier this year, making it a very significant area. Overall, I believe there is not much to complain about here, as there are no bearish indications to be seen.Moving Average AnalysisYahoo FinanceThe 13-week SMA had a bullish crossover with the 26-week SMA earlier this year where the 13-week SMA just dipped below the 26-week SMA and bounced back very quickly. The gap between the SMAs has expanded rapidly lately as the stock has surged, indicating accelerating bullish momentum. Again, the stock trades far above the SMAs, showing that it could be overbought with the 13-week SMA's support at only 237. For the Bollinger Bands, the stock remains above the upper band, showing that it is indeed still overbought in the longer term time frame. Therefore, a further pullback in the stock is definitely not out of the question and could, in fact, be healthy for the stock's long-term trend. The 20-week midline is only at around 206, but its support is nearer than the 26-week SMA. From my analysis, there is nothing wrong with MicroStrategy stock in the long term, even if it continues its recent pullback. The MAs are solidly bullish, and the stock just needs a healthy correction.Indicator AnalysisYahoo FinanceThe MACD had a bullish crossover with the signal line back in late September, and the stock has surged since then. The gap between the lines continues to expand as demonstrated by the green histogram and again shows accelerating bullish momentum. Like in the daily analysis, the weekly MACD's run to 5-year highs, confirms the recent surge in the stock. For the RSI, it is currently above the overbought 70 zone as it is at 80.41. There is some slight negative divergence with the RSI here, as the most recent peak fails to surpass the peak earlier this year and the one back in 2021. Since the MACD does confirm the recent run, I believe this divergence signal has less significance and should be taken with a grain of salt. Lastly, for the stochastics, the %K has crossed below %D within the overbought 80 zone in October, a bearish indication. However, both lines have generally remained in or near that zone since the bearish crossover, showing that bullishness has been sustained despite the negative signal. From my analysis, these weekly indicators are slightly more mixed in their signalling as there are both bullish and bearish indications here, but I believe the MACD's confirmation of the bull run should give investors some peace of mind.TakeawayOverall, I would say that the long-term technical outlook for MicroStrategy is also positive, as the vast majority of signals are bullish. The charts show that the stock has broken out of an upward channel and is now in an accelerated uptrend, while the MAs once again show accelerating bullish momentum. For the indicators, there were mixed signals that show some uncertainty, but as discussed above, I would consider the MACD's bullish confirmation as the most important signal.Fundamentals & ValuationEarningsData by YChartsMicroStrategy reported their Q3 earnings back in late October and showed weak operating results. They reported revenues of $116.1 million, down 10.3% YoY and a GAAP Net Loss of $1.72 per share. Both figures missed expectations with revenue missing by $5.38 million and EPS missing by $1.60. As you can see in the charts above, revenue is at weak levels compared to past years and EPS is on a worrying trajectory. Of course, these operational results have taken a back seat as the focus is firmly on the company's Bitcoin investments. MicroStrategy reported a 5.1% \"BTC Yield\" KPI in the quarter and projected a target annual BTC Yield of 6-10% from 2025 to 2027. It also announced a $21 billion equity offering at market price and an additional raising of $21 billion from fixed-income securities to fund its Bitcoin investments. As of this report, they are holding 252,220 Bitcoins, translating into a current total market value of $23.5 billion. The company has made significant purchases since then with the most recent purchases occurring last week, where they purchased an additional 55,000 Bitcoins. As of this latest Sunday, they hold 386,700 Bitcoins, translating into a current total market value of $36.1 billion. From the chart above, you can see that the company's book value has soared in the past two years along with the bull run in Bitcoin itself.ValuationData by YChartsIn my view, it is clear that MicroStrategy is overvalued at current levels. Earnings are now negative, and so a P/E analysis would be irrelevant. The P/S ratio is currently at 167, dropping slightly from its all-time highs of over 180 recently. The P/B ratio is currently at 24 and is at a five-year-high, excluding the 2021-2022 spike. As I said earlier, of course, the focus has shifted to Bitcoin, but the company's current market cap of $76 billion shows that its Bitcoin holdings of $36.1 billion are just a portion of the value. Therefore, the P/S should still be a relevant measure of value for the stock and so with revenues near five-year lows, I believe the current P/S ratio is unjustified. For the P/B ratio, MicroStrategy started to buy Bitcoin back in 2020 and has been increasing their holdings since then, which deserves a premium, but the P/B ratio is now at approximately 2 times the five-year average, excluding the 2021 spike. Despite their aggressive strategy, I, personally, find the P/B ratio of over 24 to be too rich. From my analysis of the P/S and P/B ratios, I believe the stock is overvalued at current levels. For MicroStrategy stock, Seeking Alpha currently has an F valuation rating for the P/S ratio and a D- rating for the P/B ratio, confirming my evaluation.ConclusionFrom the above analysis, it is clear that the technicals differ highly with the fundamentals on their outlooks for the stock. The vast majority of technical indications were bullish as the chart showed the stock is in accelerated uptrends while MAs show strong bullish momentum. While indicators were a bit more mixed overall, there were key signals of strength that confirm the recent surge in the stock. For the fundamentals, with revenue being very sluggish, I find the stock to be overvalued in terms of the P/S ratio and while the increasingly large Bitcoin pile deserves a P/B expansion, I believe the ratio has gone too far currently as it is at an eye-watering level of 24. I therefore conclude that the stock is significantly overvalued at current levels. While the stock could revert to reflecting its fundamentals in the long run and prove Citron Research to be right in the long run, in the near term, I believe the stock could have room to run due to the technicals being heavily in MicroStrategy's favour. With conflicting technical and fundamental signals, I initiate the stock at a hold rating, but I believe shorts are at a high risk of being burned before their predictions come true.","news_type":1},"isVote":1,"tweetType":1,"viewCount":429,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":373398480003368,"gmtCreate":1732201606737,"gmtModify":1732201824743,"author":{"id":"4185504823479892","authorId":"4185504823479892","name":"Filby","avatar":"https://community-static.tradeup.com/news/default-avatar.jpg","crmLevel":1,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4185504823479892","authorIdStr":"4185504823479892"},"themes":[],"htmlText":"This will end badly. Unsustainable.&nbsp;","listText":"This will end badly. Unsustainable.&nbsp;","text":"This will end badly. Unsustainable.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/373398480003368","repostId":"2485170029","repostType":2,"isVote":1,"tweetType":1,"viewCount":118,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":373048773320864,"gmtCreate":1732086714657,"gmtModify":1732087216782,"author":{"id":"4185504823479892","authorId":"4185504823479892","name":"Filby","avatar":"https://community-static.tradeup.com/news/default-avatar.jpg","crmLevel":1,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4185504823479892","authorIdStr":"4185504823479892"},"themes":[],"htmlText":"Microstrategy is all in on Bitcoin. When Bitcoin runs out of new investors they will both fall spectacularly. Would love to own a five year short on both.&nbsp;","listText":"Microstrategy is all in on Bitcoin. When Bitcoin runs out of new investors they will both fall spectacularly. Would love to own a five year short on both.&nbsp;","text":"Microstrategy is all in on Bitcoin. When Bitcoin runs out of new investors they will both fall spectacularly. Would love to own a five year short on both.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":1,"repostSize":0,"link":"https://ttm.financial/post/373048773320864","repostId":"2484399099","repostType":2,"repost":{"id":"2484399099","kind":"highlight","pubTimestamp":1732080557,"share":"https://ttm.financial/m/news/2484399099?lang=&edition=fundamental","pubTime":"2024-11-20 13:29","market":"hk","language":"en","title":"MicroStrategy Could Be A Multi-Trillion Dollar Company","url":"https://stock-news.laohu8.com/highlight/detail?id=2484399099","media":"seekingalpha","summary":"MicroStrategy is effectively Bitcoin's only investment bank.MSTR's unique strategy involves issuing securities backed by BTC, creating significant value through a spread between BTC's CAGR and fiat cost of capital.Its BTC purchases are best thought of as revenue, and its rock bottom costs of capital are best thought of as costs of revenue.MSTR's market cap could potentially reach $690 billion to $3 trillion, driven by its unparalleled role in the BTC ecosystem and virtually impregnable moat of owning 1.3% of all BTC.Joe Raedle  Frankly, I got MicroStrategy  wrong. I've been heavily long and consistently bullish on MSTR in my Seeking Alpha articles, but I didn't fully grasp the enormity of what they were doing. There haven't been many bullish","content":"<html><head></head><body><h2 id=\"id_1276998721\">Summary</h2><ul style=\"\"><li><p>MicroStrategy is effectively Bitcoin&#39;s only investment bank.</p></li><li><p>MSTR&#39;s unique strategy involves issuing securities backed by BTC, creating significant value through a spread between BTC&#39;s CAGR and fiat cost of capital.</p></li><li><p>Its BTC purchases are best thought of as revenue, and its rock bottom costs of capital are best thought of as costs of revenue.</p></li><li><p>MSTR&#39;s market cap could potentially reach $690 billion to $3 trillion, driven by its unparalleled role in the BTC ecosystem and virtually impregnable moat of owning 1.3% of all BTC.</p></li></ul><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/4f23ab0b9020157aa16640d81e82097d\" alt=\"Bitcoin Conference Draws Cryptocurrency Fans To Miami\" title=\"Bitcoin Conference Draws Cryptocurrency Fans To Miami\" tg-width=\"750\" tg-height=\"500\"/><span>Bitcoin Conference Draws Cryptocurrency Fans To Miami</span></p><p>Frankly, I got <a href=\"https://laohu8.com/S/MSTR\">MicroStrategy</a> wrong. I&#39;ve been heavily long and consistently bullish on MSTR in my Seeking Alpha articles, but I didn&#39;t fully grasp the enormity of what they were doing. There haven&#39;t been many bullish voices for MSTR. Most people focus on the market cap&#39;s premium over the company&#39;s BTC holdings and scream &#34;overvalued&#34; and &#34;strong sell.&#34; This was the mistake of Kerrisdale Capital, which would be seriously underwater on their trade if they had kept it open. Last time, I warned against long BTC, short MSTR pair trades.</p><p>In the past, I have focused on the fact that BTC per share was growing, which justifies a premium. After all, most stocks trade at over 1X their book value because they are expected to grow their book value per share over time. I also focused on MSTR&#39;s use of intelligent leverage, where they sold their implied volatility in the form of convertible debt. This allows them to leverage BTC with near 0 interest rates, increase their volatility, and do more convertible issuances at better terms.</p><p>MSTR&#39;s convertible bonds have outperformed BTC and the S&amp;P 500. And its common stock has outperformed every single company in the index, since it started buying BTC in 2021.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/cb24afb9043d95f9480a92a728ccda8f\" alt=\"MSTR Has Outperformed Every Stock In the SPX (MSTR)\" title=\"MSTR Has Outperformed Every Stock In the SPX (MSTR)\" tg-width=\"1132\" tg-height=\"628\"/><span>MSTR Has Outperformed Every Stock In the SPX (MSTR)</span></p><p style=\"text-align: left;\"></p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/d602bf0160eab348a9c760002140cbed\" alt=\"MSTR Convertibles Have Outperformed (MSTR)\" title=\"MSTR Convertibles Have Outperformed (MSTR)\" tg-width=\"1177\" tg-height=\"652\"/><span>MSTR Convertibles Have Outperformed (MSTR)</span></p><p>For a long time, this was my perspective of MSTR.</p><p>It was far more correct than those who said MSTR was a leveraged BTC fund which must trade at the NAV. But it was far off from what MSTR actually is, which is what I&#39;m writing this article about.</p><p>To set the stage: MSTR is a &#34;meta&#34; bet on BTC. By this, I mean it is more of a pure play on BTC than BTC itself. This was shocking to me because I thought nothing could be more of a financial bet on an asset than owning the asset itself.</p><p>Now for the practical revelation: MSTR is the only Bitcoin investment bank and will, in the future, be the most well-capitalized Bitcoin investment bank ever.</p><p>Let&#39;s see why.</p><h2 id=\"id_3221466396\">Bitcoin&#39;s Only Investment Bank</h2><p>MicroStrategy is like Bitcoin&#39;s investment bank because all MicroStrategy securities (convertible bonds and common stock for now, but the issuance of other securities is also on the table) are backed ultimately by BTC. Technically, there is also MicroStrategy&#39;s software business, but for simplicity we can omit this from the conversation. Note that I&#39;m using &#34;MicroStrategy&#34; and not &#34;MSTR&#34; on purpose to distinguish the company from the common stock security—I will do this throughout the article and only use &#34;MSTR&#34; when specifically talking about the common stock.</p><p>MicroStrategy is an operation that buys BTC by raising money from capital markets. But another way to understand this flow of cash is to think of Bitcoin itself as the only client of MicroStrategy, the investment bank.</p><p>A traditional investment bank securitizes the commitments of their client. It gives these securities to the capital markets in return for cash. It then passes the cash off to its client and takes a cut for the work. The client uses the cash to increase its value via business operations and pay off commitments: dividends and interest for equity and debt, respectively. Investment banking is a central component of any advanced, modern economy because it helps link savers and borrowers, enabling the intertemporal exchange of money. This is the function of all capital markets.</p><p>This is basically what MicroStrategy does. MicroStrategy securitizes BTC by issuing MicroStrategy securities. These are like Bitcoin securities because it&#39;s all backed by the BTC held by MicroStrategy. MicroStrategy then sells the securities to the capital markets and gives all the cash to its client, Bitcoin. Now, the only main difference is that rather than taking a cut in cash, MicroStrategy&#39;s cut is owning BTC. This would be like a traditional investment bank taking a cut by keeping some of the equity or debt of its client. Remember this point.</p><p>A good investment bank is able to square the needs of its client and the capital markets. Imagine if the markets really wanted bonds and a client wanted to raise money. A good investment bank provides the research and consulting services which informs the client, &#34;Hey! Don&#39;t do an equity raise, these people love debt right now, and you&#39;d get a better deal.&#34; It is a win-win. The market gets what it wants, and the client raises more money at favorable terms.</p><p>This is also what MicroStrategy does for Bitcoin. I&#39;ve listened to the last three MicroStrategy earnings calls live (because MSTR is a huge chunk of my portfolio) and they always mention that they are looking for &#34;favorable&#34; terms from the market.</p><p>If the appetite for convertibles is good, then they issue convertibles. An example of this was the week before 20 September, where they got $1.01 billion from convertibles.</p><p>If the appetite for MSTR shares is strong, then they do at-the-market (ATM) offerings. An example of this was the week before 11 November, where they got $2.03 billion from ATM offerings.</p><p>MicroStrategy is that good investment bank which maximizes the money raised for its client, Bitcoin.</p><p>Another thing a good investment bank does for clients is help market the clients&#39; security offerings. Traditionally, this looks like publishing sell-side research reports which explain the investment merits. The most important result is that the price of the client&#39;s stock goes up because the buy-side becomes aware of the facts, and they start taking positions.</p><p>This is also precisely what MicroStrategy does for Bitcoin. MicroStrategy considers itself the world&#39;s first &#34;Bitcoin Development Company.&#34; The Executive Chairman, Michael Saylor, has spent hundreds of hours on podcasts talking about Bitcoin. MicroStrategy hosts events like Bitcoin For Corporations, in which they are open-source their playbook for generating excess returns via a Bitcoin treasury strategy. Like the role of traditional investment banks, all of this action serves to increase the knowledge and awareness of BTC among the global investing and finance community.</p><p>There are many more examples of how MicroStrategy behaves like an investment bank with Bitcoin as its only client. But I&#39;ll mention only one more because this one is particularly important, and it is also a distinction from traditional investment banks. MicroStrategy&#39;s BTC purchases are effectively cornering the BTC market by removing supply from the market. Saylor has been adamant that he will never sell the BTC. The force of raising billions of dollars and piling everything into BTC is a major factor which has and will continue to increase BTC&#39;s price. The other force is BTC&#39;s absolute scarcity—when supply is removed from the market, there will never be more supply to replace it.</p><p>MSTR&#39;s meteoric rise is itself an ongoing marketing campaign for a Bitcoin acquisition strategy. I think every single CFO, public or private, must contend with the fact that they might be giving their shareholders suboptimal stock performance by ignoring BTC. Every single informed investor, I believe, must contend with the fact that if they don&#39;t own something that is acquiring BTC, they are possibly depriving themselves to suboptimal performance (and thus far those equities without BTC have demonstrably underperformed—this is just the objective fact).</p><p>But the result of more companies doing this is that the cornering of the BTC market will become much stronger. MicroStrategy is one public company. If 10 public companies start doing this, there is going to be much more demand pressure on BTC.</p><h2 id=\"id_1769003978\">How Does This Impact MSTR Value?</h2><p>MSTR is the equity position in this investment bank. Value accrues to equity holders of financial institutions from a spread. Banks lend at one rate and borrow at another. Investment banks sell securities at one price and take a cut, which means they effectively &#34;bought&#34; the securities at a lower price.</p><p>MSTR&#39;s spread is between the fiat cost of capital and BTC&#39;s fiat CAGR. BTC&#39;s CAGR is well over 50% on most multi-year windows. The fiat cost of capital with convertible bonds is extremely low. Bonds are a bit higher. The equity cost of capital is even higher—think S&amp;P 500 with a higher beta. But none of this is remotely close to BTC&#39;s CAGR. Thus, there is a substantial spread which accrues to shareholders.</p><p>I think this is how one should see MSTR. When you take on this perspective, the premium over the BTC holdings becomes a much more remote aspect of the valuation picture. People are tunnel visioned on the premium, but they really shouldn&#39;t be.</p><p>Here&#39;s where the premium is important. Remember how I said that the core divergence from traditional investment banks is that MicroStrategy holds the BTC, which is like a traditional investment bank holding onto a bunch of shares from the deal they do with their clients?</p><p>A normal investment bank would get the cash and distribute it to shareholders in a dividend or buyback. MSTR takes the cash and distributes it to shareholders in the form of a higher BTC per assumed diluted share. They call this BTC Yield.</p><p>Now it should all come together. You don&#39;t have to think of the premium as a function of BTC Yield. This was my mistake before: I thought that the premium was justified because BTC Yield was positive.</p><p>You do have to think of the premium as the investment bank business, which captures a gigantic spread between BTC&#39;s fiat CAGR and the fiat cost of capital that the investment bank is accessing for its only client.</p><p>Put differently, MSTR is best regarded as three components, not two. The classical, and mistaken, two components are: BTC holdings and software business. The actual three components are: BTC holdings, software business, Bitcoin&#39;s investment bank. And &#34;Bitcoin&#39;s investment bank&#34; is a tremendous profit machine (as long as BTC maintains its CAGR). It just never crosses the income statement as actual earnings, and that has confused everyone. It has a huge amount of &#34;accrued revenue&#34; because over the long run this value accrues to the equity in the form of unrealized capital gains on BTC.</p><p>MicroStrategy is misunderstood because it is straddling two different monetary standards. Fiat accounting forces the treatment of BTC as a balance sheet item. The economic reality is that the BTC purchased is actually a revenue to MSTR, just as the revenue for a bank is the interest received on loans.</p><p>Here&#39;s another way to see the reality. What I am calling the &#34;Bitcoin&#39;s investment bank&#34; business segment must have costs which are reflected in the financials of the business. There are already revenues: I am arguing that revenues are the BTC that MicroStrategy purchases. The costs are interest payments on convertible debt and dilutions on the equity as a result of convertibles and ATM offerings.</p><p>To tie it back to the bank example: BTC is revenue to MSTR, while interest expenses and dilution are the costs. Interest on loans is revenue to a bank while interest paid to depositors are the costs.</p><h2 id=\"id_685512451\">Addressing One Rebuttal</h2><p>Now, you might be thinking: &#34;But an actual investment bank has to give the money it raises to its client. You can&#39;t just treat the money MicroStrategy raises as revenues which flow to MSTR! If you claim Bitcoin is the client, then Bitcoin needs to be taking that money to do something with it to make BTC more successful! And if Bitcoin is taking that money, then how can you say that it is a revenue to MSTR, which is a separate entity?&#34;</p><p>If this is your rebuke, then it means you deeply understand the financial sector. If you didn&#39;t think about this, you are likely in good company. The critique is saying that there are some awkward situations when you take the &#34;Bitcoin as a client&#34; observation to its logical conclusion because Bitcoin is an inanimate thing, and it isn&#39;t a group of people working towards the human endeavor of value creation.</p><p>Here&#39;s why I think we can look past this rebuke, and effectively sidestep it.</p><p>Again, MicroStrategy&#39;s underwriting fee is a stake in the client. It is not dollars. An underwriting fee is revenue investment banks receive from clients.</p><p>When MicroStrategy buys BTC, it is literally giving the money to Bitcoin. Bitcoin immediately takes that money and &#34;creates&#34; value because the capital injection increases the market cap of the absolutely scarce BTC, all else equal. Bitcoin then gives the BTC—the underwriting fee—back to MicroStrategy.</p><p>The dollars MicroStrategy raised go to Bitcoin, and then higher-valued BTC (due to the capital injection) immediately comes back to MicroStrategy. The money indeed went to the client and went back to MicroStrategy as revenue, just in the form of BTC. This happened at the same moment in time.</p><p>And what do I mean by &#34;Bitcoin&#34; as an entity? It really is the collective of everything and everyone involved with Bitcoin. If you hold BTC, run a node, are a miner, use BTC for payments, you are part of Bitcoin. It is the network. Networks have value because people use them. So when &#34;Bitcoin&#34; gives MicroStrategy some BTC as a revenue, what&#39;s happening is some holder of BTC paid MicroStrategy the investment bank for raising money for the network. The holder got some dollars and MicroStrategy got its BTC. Hence, Bitcoin got the money and paid the revenue right back.</p><h2 id=\"id_1813224027\">What Else Can The Investment Bank Do?</h2><p>Once you internalize that MicroStrategy is Bitcoin&#39;s investment bank, you should see that MSTR can chop up the risk profile of its issued BTC securities by designing the covenants in creative ways.</p><p>So far, they&#39;ve only dealt with common stock issuance, a bit of secured debt, and convertibles. But they can also issue preferred shares, mezz debt, warrants, and structured products. These can all be adjusted to whatever risk and return profile the market wants. The only rule is that the cost of capital (which means the commitments within these securities) is lower than the expected CAGR of BTC.</p><h4 id=\"id_1905907306\">Everything else is absorbed by MSTR common stock</h4><p>And this is an extremely profound feature. Many investors desire lower volatility, lower returns. Any volatility or returns from BTC which is in excess of what these investors desire accrues to the common stock. This is how MSTR has 120 IV and meteoric growth. MSTR is the volatility and return dampener for the securities issuances of MicroStrategy.</p><p>Think of conservation of energy and mass as a metaphor for what is happening. BTC&#39;s returns and volatility comes into the system, but many investors don&#39;t want something that volatile, even if the returns are great. So MSTR takes in the BTC and absorbs a chunk of the returns and a chunk of the volatility into itself, while giving these other investors the precise return and risk profile they desire. Total volatility and returns across the system remains the same: it all comes from BTC, and there is a conservation of volatility and returns within the system. The financial engineering of MSTR comes from chopping up and distributing the desired quantity of returns and volatility to each class of investor.</p><p>As I&#39;ve covered many times before, this creates immense volatility in MSTR, which allows MicroStrategy to issue convertible debt at near 0% interest rates because they are effectively selling the volatility and monetizing the second moment of the distribution. But MicroStrategy getting more BTC translates to the investment bank segment absorbing more BTC to chop up into risk and return profiles.</p><p>As Saylor says in the Q3 earnings call:</p><blockquote><p>We think ultimately it&#39;s going to be good for investors. It&#39;s going to be good for our common stock shareholders. There&#39;s really nobody&#39;s really losing because as I&#39;ve said before, it&#39;s like bitcoin is giving us 50 vol, 50 ARR. And the world&#39;s full of people that would be delighted to take 20 vol, 20 ARR. And if we gave it to them over a long enough timeframe, it looks like—it&#39;s like a 60% BTC spread product where $100 million of capital results in $60 million of BTC gains for our shareholders. And it still results in a very compelling instrument that&#39;s very easy to understand for a new class of investors.</p></blockquote><p><em>What other risk and return profiles are there?</em></p><p>Preferred stock can be structured to give the investor some number of returns via dividends. This gives them some upside and little downside. And generally stable cash flows.</p><p>There are also convertibles on preferred stock. This would give the investor the option to acquire the above risk and return profile.</p><p>There are warrants, which are effectively pure long-term call options on MSTR. I have stated in the past that MicroStrategy can issue warrants to buy BTC calls. After all, MSTR has a significantly higher IV than BTC, so this could be a very natural arbitrage.</p><p>There are different classes of debt with various covenants which might be useful to investors.</p><p>And of course there are structured products for ISDA-holders. These can literally be designed to fit any risk/ return profile.</p><p>The point is that convertibles are the tip of the iceberg for all the different securities markets which MicroStrategy the investment bank can do business in. With every issuance, its client, Bitcoin, gets a few more billion dollars in capital, which pushes up the BTC market cap by a lot more than a few billion dollars.</p><h2 id=\"id_2646134015\">Investment Bank Valuation</h2><p>So if the BTC purchases are revenues and the interest rate and dilution are the cost of revenues, then we can redo MSTR&#39;s financials to reflect this view of economic reality. You can see the entire history of MicroStrategy BTC purchases on Michael Saylor (MicroStrategy) Portfolio Tracker. I simply took those entries and aggregated them by quarter starting from Q1 of 2021.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/0c2d5b585a36d828f56a9943c969903b\" tg-width=\"577\" tg-height=\"504\"/></p><p>This reflects (in order from left to right): the total cost of all BTC purchased in the quarter, the total value of that BTC on 16 November 2024, and the total unrealized capital gain thus far from that purchase.</p><p style=\"text-align: left;\">Since the BTC purchased is &#34;revenue&#34; to MSTR the investment bank, the cost of the BTC purchased column will be the quarterly &#34;revenue&#34; in our new model. A combination of MSTR&#39;s interest rate on debt and dilution is the cost of that revenue. I assume the cost of capital to be 15%, it&#39;s just under 2X the average annual return of the S&amp;P 500, which is the equity cost of capital. I multiply the &#34;revenue&#34; by 0.85 to get the gross profit. Another way to say this is that 15% of the BTC MSTR purchases is actually lost on a per share basis due to a combination of interest expenses and dilution.</p><p style=\"text-align: left;\">And the column of P/L is best understood as each quarter&#39;s contribution to current accrued revenues. If you add up the entire column, then that is the total unrealized capital gains of MSTR&#39;s BTC holdings. This changes with the price of BTC. The restated columns look like this:</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/f44529b1a000f6bc070cb06932c54a35\" tg-width=\"604\" tg-height=\"493\"/></p><p>So really, the investment bank was responsible for over $5 billion in gross profits this year alone. And it has grown tremendously year after year from 2023 and 2022. All of this is before we look at the accrued revenues. When you add all the accrued revenues together, you get $6.7 billion. I hope MSTR&#39;s $69 billion market cap is making more sense now. Even with just the $5 billion gross, we&#39;re looking at an adjusted TTM PE ratio of 14 (69 billion / 5 billion = 14).</p><p style=\"text-align: left;\">Here are the PE&#39;s for the five bulge bracket US investment banks:</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/b8a901c6e3f83ede835f2dafeb427161\" alt=\"IB Multiples (Seeking Alpha)\" title=\"IB Multiples (Seeking Alpha)\" tg-width=\"1269\" tg-height=\"387\"/><span>IB Multiples (Seeking Alpha)</span></p><p style=\"text-align: left;\">Pretty close. In fact, MSTR looks to be on the lower end of this list.</p><p style=\"text-align: left;\">You could say that the earnings on these multiples are net and not gross profits, but then I would counter by saying that $6.7 billion in accrued revenues with 100% profit margins (this is what unrealized capital gains are) were not included in my MSTR adjusted PE multiple. I could also counter by saying that I used the entire MSTR market cap (a third of which is unencumbered BTC) to divide by the investment bank earnings, thus using a much bigger numerator and inflating the end multiple. A third possible counter would be that I used a pretty enormous 15% cost of capital assumption. Nearly all of MSTR&#39;s debt has been under 1% interest rate.</p><p style=\"text-align: left;\">These are napkin math, so I want to make the margin of safety abundantly clear. These are three layers of significant margin of safety.</p><p style=\"text-align: left;\">Now we move to forward earnings. MicroStrategy announced a $42 billion capital raise to be carried out over the next 3 years. Nearly all proceeds will go to buying a stake in the client: Bitcoin. That is an average of $14 billion per year. Even if we assumed a 30% cost of capital, the gross profit from this would be $10 billion per year, which is 2X what MSTR did this year. So if the business has 100% growth and a 14 PE, that puts its PEG ratio at 0.14, again with all that margin of safety baked in.</p><p style=\"text-align: left;\">The bulge bracket numbers above indicate forward PEG non-GAAP ratios of 5–12X MSTR&#39;s 0.14 (I&#39;m dropping C and JPM). This tells me that, conservatively, we have another 5X from the current market cap of $69 billion.</p><p style=\"text-align: left;\">Now we have to consider that MSTR has no competition as an investment bank for Bitcoin. It currently is the only one because no one else is issuing securities like MicroStrategy is. Also, MicroStrategy will always be the most well capitalized Bitcoin investment bank because no one else will have 1.3% of the BTC supply. Finally, it is only MSTR which has enough volatility to support such a convertible bonds strategy. If anyone else tried to add BTC to its balance sheet, its equity still wouldn&#39;t be as volatile as MSTR. This is effectively a permanent moat.</p><p style=\"text-align: left;\">So there probably should be a &#34;monopoly&#34; premium attached to MSTR too. An investor who wants traditional investment bank exposure can pick any of the several investment banks. An investor who wants a Bitcoin investment bank is left with only one option. If you are unconvinced about a monopoly premium, I urge you to take a look at how NVDA is priced relative to other chipmakers.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/30de4a69a7fdf2793378ba232c13baeb\" alt=\"Chips Multiples (Seeking Alpha)\" title=\"Chips Multiples (Seeking Alpha)\" tg-width=\"1258\" tg-height=\"531\"/><span>Chips Multiples (Seeking Alpha)</span></p><p style=\"text-align: left;\">Market leaders always get a premium. And chips aren&#39;t even close to a monopoly. It would be much more extreme in a real monopoly. I will put this premium at 2–4X a traditional investment bank&#39;s multiples (which exist in a much more competitive market).</p><p style=\"text-align: left;\">If we apply the monopoly premium of 2X and then apply the PEG ratios, the investment bank&#39;s equity value alone is probably worth 10–24X what the current market cap is now, with all three layers of margin of safety still intact. If we remove those margins of safety, this makes MSTR a potentially multi-trillion dollar business. <strong>So, my official MSTR market cap target: somewhere between $690 billion and $3 trillion</strong>.</p><p style=\"text-align: left;\">Lastly, this analysis derives equity value based on the investment bank &#34;earnings&#34;. We haven&#39;t yet covered the 279,420 BTC on the balance sheet. That is another $25 billion. MSTR also retains the option to deploy the BTC to earn additional income, which should, of course, increase the value of the raw holdings.</p><p style=\"text-align: left;\">One final quirk. Notice how the premium to BTC NAV completely disappears as a consideration after you see things this way?</p><h2 id=\"id_3042884024\" style=\"text-align: left;\">Risks And Caveats</h2><p style=\"text-align: left;\">MSTR would fail if Bitcoin fails. The whole investment thesis is predicated upon accepting Bitcoin risk. But if BTC crashes, I&#39;m not sure that would mean MSTR would crash harder. Positive BTC Yield should be regarded as an alpha on top of BTC performance, and I&#39;ve argued this in the past too. I think it really comes down to the duration of a BTC drawdown. If the drawdown is extended and MSTR&#39;s price is below the conversion price on its convertibles, then convertible bonds investors might choose not to convert. This could force MSTR to issue more debt to pay off these demands, or even to sell BTC. That could be catastrophic for sentiment.</p><p style=\"text-align: left;\">I think it is also possible that MSTR could fail if regulators step in to squash the business. Maybe a law can be passed that securities issuances cannot be used to buy BTC, or something to that effect. This would certainly be a remote, tail risk. The incoming Trump administration is definitely more politically aligned with crypto than the outgoing administration. I think it is extremely unlikely for MSTR to get regulated away.</p><p style=\"text-align: left;\"><strong>One important caveat to the analysis and napkin math I did here is that I&#39;m not saying the share price will 10–24X. I am saying the market cap will.</strong> MSTR does a ton of dilutions, so share price growth will always be less than market cap growth. I&#39;m not sure how much dilution will occur, but personally, I think that the upside is too massive to be concerned about this.</p><p style=\"text-align: left;\">The last caveat is that most people may not see it this way for a while. I anticipate a lot of pushback against this thesis because it is very unique compared to what is normally said about MSTR, or anything in securities analysis for that matter. The lack of recognition of this economic reality could take a long time to correct. While there is opportunity in that, there are also significant risks. Being early and being wrong is often the same thing in markets.</p><h2 id=\"id_648834402\" style=\"text-align: left;\">Conclusion</h2><p style=\"text-align: left;\">I think MSTR is more of a Bitcoin bet than BTC itself. It capitalizes on aspects of Bitcoin that a simple BTC investment cannot do so efficiently. With BTC becoming more mainstream, you will certainly see BTC backed securities, of which MSTR is the core beneficiary. MSTR is monetizing BTC&#39;s volatility and its network effect growth.</p></body></html>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>MicroStrategy Could Be A Multi-Trillion Dollar Company</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nMicroStrategy Could Be A Multi-Trillion Dollar Company\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-11-20 13:29 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4738579-microstrategy-could-be-a-multi-trillion-dollar-company><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummaryMicroStrategy is effectively Bitcoin's only investment bank.MSTR's unique strategy involves issuing securities backed by BTC, creating significant value through a spread between BTC's CAGR and ...</p>\n\n<a href=\"https://seekingalpha.com/article/4738579-microstrategy-could-be-a-multi-trillion-dollar-company\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"BK4585":"ETF&股票定投概念","BK4516":"特朗普概念","BK4588":"碎股","BK4596":"哈里斯概念","BK4595":"比特币概念","BK4023":"应用软件","MSTR":"MicroStrategy"},"source_url":"https://seekingalpha.com/article/4738579-microstrategy-could-be-a-multi-trillion-dollar-company","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2484399099","content_text":"SummaryMicroStrategy is effectively Bitcoin's only investment bank.MSTR's unique strategy involves issuing securities backed by BTC, creating significant value through a spread between BTC's CAGR and fiat cost of capital.Its BTC purchases are best thought of as revenue, and its rock bottom costs of capital are best thought of as costs of revenue.MSTR's market cap could potentially reach $690 billion to $3 trillion, driven by its unparalleled role in the BTC ecosystem and virtually impregnable moat of owning 1.3% of all BTC.Bitcoin Conference Draws Cryptocurrency Fans To MiamiFrankly, I got MicroStrategy wrong. I've been heavily long and consistently bullish on MSTR in my Seeking Alpha articles, but I didn't fully grasp the enormity of what they were doing. There haven't been many bullish voices for MSTR. Most people focus on the market cap's premium over the company's BTC holdings and scream \"overvalued\" and \"strong sell.\" This was the mistake of Kerrisdale Capital, which would be seriously underwater on their trade if they had kept it open. Last time, I warned against long BTC, short MSTR pair trades.In the past, I have focused on the fact that BTC per share was growing, which justifies a premium. After all, most stocks trade at over 1X their book value because they are expected to grow their book value per share over time. I also focused on MSTR's use of intelligent leverage, where they sold their implied volatility in the form of convertible debt. This allows them to leverage BTC with near 0 interest rates, increase their volatility, and do more convertible issuances at better terms.MSTR's convertible bonds have outperformed BTC and the S&P 500. And its common stock has outperformed every single company in the index, since it started buying BTC in 2021.MSTR Has Outperformed Every Stock In the SPX (MSTR)MSTR Convertibles Have Outperformed (MSTR)For a long time, this was my perspective of MSTR.It was far more correct than those who said MSTR was a leveraged BTC fund which must trade at the NAV. But it was far off from what MSTR actually is, which is what I'm writing this article about.To set the stage: MSTR is a \"meta\" bet on BTC. By this, I mean it is more of a pure play on BTC than BTC itself. This was shocking to me because I thought nothing could be more of a financial bet on an asset than owning the asset itself.Now for the practical revelation: MSTR is the only Bitcoin investment bank and will, in the future, be the most well-capitalized Bitcoin investment bank ever.Let's see why.Bitcoin's Only Investment BankMicroStrategy is like Bitcoin's investment bank because all MicroStrategy securities (convertible bonds and common stock for now, but the issuance of other securities is also on the table) are backed ultimately by BTC. Technically, there is also MicroStrategy's software business, but for simplicity we can omit this from the conversation. Note that I'm using \"MicroStrategy\" and not \"MSTR\" on purpose to distinguish the company from the common stock security—I will do this throughout the article and only use \"MSTR\" when specifically talking about the common stock.MicroStrategy is an operation that buys BTC by raising money from capital markets. But another way to understand this flow of cash is to think of Bitcoin itself as the only client of MicroStrategy, the investment bank.A traditional investment bank securitizes the commitments of their client. It gives these securities to the capital markets in return for cash. It then passes the cash off to its client and takes a cut for the work. The client uses the cash to increase its value via business operations and pay off commitments: dividends and interest for equity and debt, respectively. Investment banking is a central component of any advanced, modern economy because it helps link savers and borrowers, enabling the intertemporal exchange of money. This is the function of all capital markets.This is basically what MicroStrategy does. MicroStrategy securitizes BTC by issuing MicroStrategy securities. These are like Bitcoin securities because it's all backed by the BTC held by MicroStrategy. MicroStrategy then sells the securities to the capital markets and gives all the cash to its client, Bitcoin. Now, the only main difference is that rather than taking a cut in cash, MicroStrategy's cut is owning BTC. This would be like a traditional investment bank taking a cut by keeping some of the equity or debt of its client. Remember this point.A good investment bank is able to square the needs of its client and the capital markets. Imagine if the markets really wanted bonds and a client wanted to raise money. A good investment bank provides the research and consulting services which informs the client, \"Hey! Don't do an equity raise, these people love debt right now, and you'd get a better deal.\" It is a win-win. The market gets what it wants, and the client raises more money at favorable terms.This is also what MicroStrategy does for Bitcoin. I've listened to the last three MicroStrategy earnings calls live (because MSTR is a huge chunk of my portfolio) and they always mention that they are looking for \"favorable\" terms from the market.If the appetite for convertibles is good, then they issue convertibles. An example of this was the week before 20 September, where they got $1.01 billion from convertibles.If the appetite for MSTR shares is strong, then they do at-the-market (ATM) offerings. An example of this was the week before 11 November, where they got $2.03 billion from ATM offerings.MicroStrategy is that good investment bank which maximizes the money raised for its client, Bitcoin.Another thing a good investment bank does for clients is help market the clients' security offerings. Traditionally, this looks like publishing sell-side research reports which explain the investment merits. The most important result is that the price of the client's stock goes up because the buy-side becomes aware of the facts, and they start taking positions.This is also precisely what MicroStrategy does for Bitcoin. MicroStrategy considers itself the world's first \"Bitcoin Development Company.\" The Executive Chairman, Michael Saylor, has spent hundreds of hours on podcasts talking about Bitcoin. MicroStrategy hosts events like Bitcoin For Corporations, in which they are open-source their playbook for generating excess returns via a Bitcoin treasury strategy. Like the role of traditional investment banks, all of this action serves to increase the knowledge and awareness of BTC among the global investing and finance community.There are many more examples of how MicroStrategy behaves like an investment bank with Bitcoin as its only client. But I'll mention only one more because this one is particularly important, and it is also a distinction from traditional investment banks. MicroStrategy's BTC purchases are effectively cornering the BTC market by removing supply from the market. Saylor has been adamant that he will never sell the BTC. The force of raising billions of dollars and piling everything into BTC is a major factor which has and will continue to increase BTC's price. The other force is BTC's absolute scarcity—when supply is removed from the market, there will never be more supply to replace it.MSTR's meteoric rise is itself an ongoing marketing campaign for a Bitcoin acquisition strategy. I think every single CFO, public or private, must contend with the fact that they might be giving their shareholders suboptimal stock performance by ignoring BTC. Every single informed investor, I believe, must contend with the fact that if they don't own something that is acquiring BTC, they are possibly depriving themselves to suboptimal performance (and thus far those equities without BTC have demonstrably underperformed—this is just the objective fact).But the result of more companies doing this is that the cornering of the BTC market will become much stronger. MicroStrategy is one public company. If 10 public companies start doing this, there is going to be much more demand pressure on BTC.How Does This Impact MSTR Value?MSTR is the equity position in this investment bank. Value accrues to equity holders of financial institutions from a spread. Banks lend at one rate and borrow at another. Investment banks sell securities at one price and take a cut, which means they effectively \"bought\" the securities at a lower price.MSTR's spread is between the fiat cost of capital and BTC's fiat CAGR. BTC's CAGR is well over 50% on most multi-year windows. The fiat cost of capital with convertible bonds is extremely low. Bonds are a bit higher. The equity cost of capital is even higher—think S&P 500 with a higher beta. But none of this is remotely close to BTC's CAGR. Thus, there is a substantial spread which accrues to shareholders.I think this is how one should see MSTR. When you take on this perspective, the premium over the BTC holdings becomes a much more remote aspect of the valuation picture. People are tunnel visioned on the premium, but they really shouldn't be.Here's where the premium is important. Remember how I said that the core divergence from traditional investment banks is that MicroStrategy holds the BTC, which is like a traditional investment bank holding onto a bunch of shares from the deal they do with their clients?A normal investment bank would get the cash and distribute it to shareholders in a dividend or buyback. MSTR takes the cash and distributes it to shareholders in the form of a higher BTC per assumed diluted share. They call this BTC Yield.Now it should all come together. You don't have to think of the premium as a function of BTC Yield. This was my mistake before: I thought that the premium was justified because BTC Yield was positive.You do have to think of the premium as the investment bank business, which captures a gigantic spread between BTC's fiat CAGR and the fiat cost of capital that the investment bank is accessing for its only client.Put differently, MSTR is best regarded as three components, not two. The classical, and mistaken, two components are: BTC holdings and software business. The actual three components are: BTC holdings, software business, Bitcoin's investment bank. And \"Bitcoin's investment bank\" is a tremendous profit machine (as long as BTC maintains its CAGR). It just never crosses the income statement as actual earnings, and that has confused everyone. It has a huge amount of \"accrued revenue\" because over the long run this value accrues to the equity in the form of unrealized capital gains on BTC.MicroStrategy is misunderstood because it is straddling two different monetary standards. Fiat accounting forces the treatment of BTC as a balance sheet item. The economic reality is that the BTC purchased is actually a revenue to MSTR, just as the revenue for a bank is the interest received on loans.Here's another way to see the reality. What I am calling the \"Bitcoin's investment bank\" business segment must have costs which are reflected in the financials of the business. There are already revenues: I am arguing that revenues are the BTC that MicroStrategy purchases. The costs are interest payments on convertible debt and dilutions on the equity as a result of convertibles and ATM offerings.To tie it back to the bank example: BTC is revenue to MSTR, while interest expenses and dilution are the costs. Interest on loans is revenue to a bank while interest paid to depositors are the costs.Addressing One RebuttalNow, you might be thinking: \"But an actual investment bank has to give the money it raises to its client. You can't just treat the money MicroStrategy raises as revenues which flow to MSTR! If you claim Bitcoin is the client, then Bitcoin needs to be taking that money to do something with it to make BTC more successful! And if Bitcoin is taking that money, then how can you say that it is a revenue to MSTR, which is a separate entity?\"If this is your rebuke, then it means you deeply understand the financial sector. If you didn't think about this, you are likely in good company. The critique is saying that there are some awkward situations when you take the \"Bitcoin as a client\" observation to its logical conclusion because Bitcoin is an inanimate thing, and it isn't a group of people working towards the human endeavor of value creation.Here's why I think we can look past this rebuke, and effectively sidestep it.Again, MicroStrategy's underwriting fee is a stake in the client. It is not dollars. An underwriting fee is revenue investment banks receive from clients.When MicroStrategy buys BTC, it is literally giving the money to Bitcoin. Bitcoin immediately takes that money and \"creates\" value because the capital injection increases the market cap of the absolutely scarce BTC, all else equal. Bitcoin then gives the BTC—the underwriting fee—back to MicroStrategy.The dollars MicroStrategy raised go to Bitcoin, and then higher-valued BTC (due to the capital injection) immediately comes back to MicroStrategy. The money indeed went to the client and went back to MicroStrategy as revenue, just in the form of BTC. This happened at the same moment in time.And what do I mean by \"Bitcoin\" as an entity? It really is the collective of everything and everyone involved with Bitcoin. If you hold BTC, run a node, are a miner, use BTC for payments, you are part of Bitcoin. It is the network. Networks have value because people use them. So when \"Bitcoin\" gives MicroStrategy some BTC as a revenue, what's happening is some holder of BTC paid MicroStrategy the investment bank for raising money for the network. The holder got some dollars and MicroStrategy got its BTC. Hence, Bitcoin got the money and paid the revenue right back.What Else Can The Investment Bank Do?Once you internalize that MicroStrategy is Bitcoin's investment bank, you should see that MSTR can chop up the risk profile of its issued BTC securities by designing the covenants in creative ways.So far, they've only dealt with common stock issuance, a bit of secured debt, and convertibles. But they can also issue preferred shares, mezz debt, warrants, and structured products. These can all be adjusted to whatever risk and return profile the market wants. The only rule is that the cost of capital (which means the commitments within these securities) is lower than the expected CAGR of BTC.Everything else is absorbed by MSTR common stockAnd this is an extremely profound feature. Many investors desire lower volatility, lower returns. Any volatility or returns from BTC which is in excess of what these investors desire accrues to the common stock. This is how MSTR has 120 IV and meteoric growth. MSTR is the volatility and return dampener for the securities issuances of MicroStrategy.Think of conservation of energy and mass as a metaphor for what is happening. BTC's returns and volatility comes into the system, but many investors don't want something that volatile, even if the returns are great. So MSTR takes in the BTC and absorbs a chunk of the returns and a chunk of the volatility into itself, while giving these other investors the precise return and risk profile they desire. Total volatility and returns across the system remains the same: it all comes from BTC, and there is a conservation of volatility and returns within the system. The financial engineering of MSTR comes from chopping up and distributing the desired quantity of returns and volatility to each class of investor.As I've covered many times before, this creates immense volatility in MSTR, which allows MicroStrategy to issue convertible debt at near 0% interest rates because they are effectively selling the volatility and monetizing the second moment of the distribution. But MicroStrategy getting more BTC translates to the investment bank segment absorbing more BTC to chop up into risk and return profiles.As Saylor says in the Q3 earnings call:We think ultimately it's going to be good for investors. It's going to be good for our common stock shareholders. There's really nobody's really losing because as I've said before, it's like bitcoin is giving us 50 vol, 50 ARR. And the world's full of people that would be delighted to take 20 vol, 20 ARR. And if we gave it to them over a long enough timeframe, it looks like—it's like a 60% BTC spread product where $100 million of capital results in $60 million of BTC gains for our shareholders. And it still results in a very compelling instrument that's very easy to understand for a new class of investors.What other risk and return profiles are there?Preferred stock can be structured to give the investor some number of returns via dividends. This gives them some upside and little downside. And generally stable cash flows.There are also convertibles on preferred stock. This would give the investor the option to acquire the above risk and return profile.There are warrants, which are effectively pure long-term call options on MSTR. I have stated in the past that MicroStrategy can issue warrants to buy BTC calls. After all, MSTR has a significantly higher IV than BTC, so this could be a very natural arbitrage.There are different classes of debt with various covenants which might be useful to investors.And of course there are structured products for ISDA-holders. These can literally be designed to fit any risk/ return profile.The point is that convertibles are the tip of the iceberg for all the different securities markets which MicroStrategy the investment bank can do business in. With every issuance, its client, Bitcoin, gets a few more billion dollars in capital, which pushes up the BTC market cap by a lot more than a few billion dollars.Investment Bank ValuationSo if the BTC purchases are revenues and the interest rate and dilution are the cost of revenues, then we can redo MSTR's financials to reflect this view of economic reality. You can see the entire history of MicroStrategy BTC purchases on Michael Saylor (MicroStrategy) Portfolio Tracker. I simply took those entries and aggregated them by quarter starting from Q1 of 2021.This reflects (in order from left to right): the total cost of all BTC purchased in the quarter, the total value of that BTC on 16 November 2024, and the total unrealized capital gain thus far from that purchase.Since the BTC purchased is \"revenue\" to MSTR the investment bank, the cost of the BTC purchased column will be the quarterly \"revenue\" in our new model. A combination of MSTR's interest rate on debt and dilution is the cost of that revenue. I assume the cost of capital to be 15%, it's just under 2X the average annual return of the S&P 500, which is the equity cost of capital. I multiply the \"revenue\" by 0.85 to get the gross profit. Another way to say this is that 15% of the BTC MSTR purchases is actually lost on a per share basis due to a combination of interest expenses and dilution.And the column of P/L is best understood as each quarter's contribution to current accrued revenues. If you add up the entire column, then that is the total unrealized capital gains of MSTR's BTC holdings. This changes with the price of BTC. The restated columns look like this:So really, the investment bank was responsible for over $5 billion in gross profits this year alone. And it has grown tremendously year after year from 2023 and 2022. All of this is before we look at the accrued revenues. When you add all the accrued revenues together, you get $6.7 billion. I hope MSTR's $69 billion market cap is making more sense now. Even with just the $5 billion gross, we're looking at an adjusted TTM PE ratio of 14 (69 billion / 5 billion = 14).Here are the PE's for the five bulge bracket US investment banks:IB Multiples (Seeking Alpha)Pretty close. In fact, MSTR looks to be on the lower end of this list.You could say that the earnings on these multiples are net and not gross profits, but then I would counter by saying that $6.7 billion in accrued revenues with 100% profit margins (this is what unrealized capital gains are) were not included in my MSTR adjusted PE multiple. I could also counter by saying that I used the entire MSTR market cap (a third of which is unencumbered BTC) to divide by the investment bank earnings, thus using a much bigger numerator and inflating the end multiple. A third possible counter would be that I used a pretty enormous 15% cost of capital assumption. Nearly all of MSTR's debt has been under 1% interest rate.These are napkin math, so I want to make the margin of safety abundantly clear. These are three layers of significant margin of safety.Now we move to forward earnings. MicroStrategy announced a $42 billion capital raise to be carried out over the next 3 years. Nearly all proceeds will go to buying a stake in the client: Bitcoin. That is an average of $14 billion per year. Even if we assumed a 30% cost of capital, the gross profit from this would be $10 billion per year, which is 2X what MSTR did this year. So if the business has 100% growth and a 14 PE, that puts its PEG ratio at 0.14, again with all that margin of safety baked in.The bulge bracket numbers above indicate forward PEG non-GAAP ratios of 5–12X MSTR's 0.14 (I'm dropping C and JPM). This tells me that, conservatively, we have another 5X from the current market cap of $69 billion.Now we have to consider that MSTR has no competition as an investment bank for Bitcoin. It currently is the only one because no one else is issuing securities like MicroStrategy is. Also, MicroStrategy will always be the most well capitalized Bitcoin investment bank because no one else will have 1.3% of the BTC supply. Finally, it is only MSTR which has enough volatility to support such a convertible bonds strategy. If anyone else tried to add BTC to its balance sheet, its equity still wouldn't be as volatile as MSTR. This is effectively a permanent moat.So there probably should be a \"monopoly\" premium attached to MSTR too. An investor who wants traditional investment bank exposure can pick any of the several investment banks. An investor who wants a Bitcoin investment bank is left with only one option. If you are unconvinced about a monopoly premium, I urge you to take a look at how NVDA is priced relative to other chipmakers.Chips Multiples (Seeking Alpha)Market leaders always get a premium. And chips aren't even close to a monopoly. It would be much more extreme in a real monopoly. I will put this premium at 2–4X a traditional investment bank's multiples (which exist in a much more competitive market).If we apply the monopoly premium of 2X and then apply the PEG ratios, the investment bank's equity value alone is probably worth 10–24X what the current market cap is now, with all three layers of margin of safety still intact. If we remove those margins of safety, this makes MSTR a potentially multi-trillion dollar business. So, my official MSTR market cap target: somewhere between $690 billion and $3 trillion.Lastly, this analysis derives equity value based on the investment bank \"earnings\". We haven't yet covered the 279,420 BTC on the balance sheet. That is another $25 billion. MSTR also retains the option to deploy the BTC to earn additional income, which should, of course, increase the value of the raw holdings.One final quirk. Notice how the premium to BTC NAV completely disappears as a consideration after you see things this way?Risks And CaveatsMSTR would fail if Bitcoin fails. The whole investment thesis is predicated upon accepting Bitcoin risk. But if BTC crashes, I'm not sure that would mean MSTR would crash harder. Positive BTC Yield should be regarded as an alpha on top of BTC performance, and I've argued this in the past too. I think it really comes down to the duration of a BTC drawdown. If the drawdown is extended and MSTR's price is below the conversion price on its convertibles, then convertible bonds investors might choose not to convert. This could force MSTR to issue more debt to pay off these demands, or even to sell BTC. That could be catastrophic for sentiment.I think it is also possible that MSTR could fail if regulators step in to squash the business. Maybe a law can be passed that securities issuances cannot be used to buy BTC, or something to that effect. This would certainly be a remote, tail risk. The incoming Trump administration is definitely more politically aligned with crypto than the outgoing administration. I think it is extremely unlikely for MSTR to get regulated away.One important caveat to the analysis and napkin math I did here is that I'm not saying the share price will 10–24X. I am saying the market cap will. MSTR does a ton of dilutions, so share price growth will always be less than market cap growth. I'm not sure how much dilution will occur, but personally, I think that the upside is too massive to be concerned about this.The last caveat is that most people may not see it this way for a while. I anticipate a lot of pushback against this thesis because it is very unique compared to what is normally said about MSTR, or anything in securities analysis for that matter. The lack of recognition of this economic reality could take a long time to correct. While there is opportunity in that, there are also significant risks. Being early and being wrong is often the same thing in markets.ConclusionI think MSTR is more of a Bitcoin bet than BTC itself. It capitalizes on aspects of Bitcoin that a simple BTC investment cannot do so efficiently. With BTC becoming more mainstream, you will certainly see BTC backed securities, of which MSTR is the core beneficiary. MSTR is monetizing BTC's volatility and its network effect growth.","news_type":1},"isVote":1,"tweetType":1,"viewCount":457,"authorTweetTopStatus":1,"verified":2,"comments":[{"author":{"id":"4189136748353782","authorId":"4189136748353782","name":"Reglloyd","avatar":"https://community-static.tradeup.com/news/71917acef5ce8717b38e7f29252bca57","crmLevel":1,"crmLevelSwitch":0,"idStr":"4189136748353782","authorIdStr":"4189136748353782"},"content":"Bitcoin ain’t running out of investors , period. Look at how the spot Bitcoin ETF’s are buying & wait for authorization that allows large pension funds to buy into Bitcoin…. Bitcoin has only just left the starting blocks, the 1st 2 steps have been taken and the race is far from over, the finish line way in the distance, you actually cannot see the finish line or checkered flag.","text":"Bitcoin ain’t running out of investors , period. Look at how the spot Bitcoin ETF’s are buying & wait for authorization that allows large pension funds to buy into Bitcoin…. Bitcoin has only just left the starting blocks, the 1st 2 steps have been taken and the race is far from over, the finish line way in the distance, you actually cannot see the finish line or checkered flag.","html":"Bitcoin ain’t running out of investors , period. Look at how the spot Bitcoin ETF’s are buying & wait for authorization that allows large pension funds to buy into Bitcoin…. Bitcoin has only just left the starting blocks, the 1st 2 steps have been taken and the race is far from over, the finish line way in the distance, you actually cannot see the finish line or checkered flag."}],"imageCount":0,"langContent":"EN","totalScore":0}],"defaultTab":"posts","isTTM":true}