MicroStrategy accepts short-term paper losses
The hosts argued that MicroStrategy's strategy of running a Bitcoin treasury naturally involves holding positions in the red during market downturns as part of an efficient risk-taking model.
The argument
MicroStrategy was noted to have an average cost basis of $75,700, putting its investment down by about $2 billion. The hosts argued that if the company were never in the red, it wouldn't be taking enough risk, and noted they are currently shoring up their balance sheet by clearing out convertible notes.
The thesis, stress-tested
✓ What validates it
- ✓Bitcoin price rising back above the $75,700 cost basis
- ✓Successful retirement or restructuring of outstanding convertible notes
▸ Risks discussed
- ▸Prolonged Bitcoin bear market straining the balance sheet
- ▸Inability to refinance convertible debt if equity prices fall significantly
Hear it yourself
"There was actually a $1,300,000,000 sale of iBit from a whale. I don't know if that came across your timeline, but I noticed this. The largest single cell event of iBit ever, I think. Big chunky cell. And Michael's stake is this is like front running some macro worries. Right? Just Bitcoin again being kind of canary in the coal mine of, macro troubles ahead. Yeah. It's really been like, the momentum and and, morale, I think, in the crypto industry was somewhat higher in the earlier part of the week, and this has completely got erased. You see the same thing in in Ether price."
07:15
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