Since I recorded this yesterday there has already been an update that changes some things about the offering. shares will be $80 and the deal is over prescribed so they now plan to offer 7.3m shares instead of 2.5m www.microstrategy.com/press/microstrategy-announces-pricing-of-strike-preferred-stock-offering-strk_01-31-2025
Whilst it is useful having the extra cash to buy more BTC, it does raise the interest payments from 2.5m x $8 = $20m per year to now 7.3m x $8 = $58.4m per year (2.92 times as much). This has raised $584m instead of $250m (only 2.336 times as much)
Please explain why this preferred stock offering is accretive? Let's assume MSTR share price remains at the same level. No one with STRK will want to convert to MSTR stock and MSTR can't force the conversion, then you just have the amount raised paying 8% (sorry that's now 10%) in interest ongoing. This would be a gamble that they are hoping for BTC to rise continually year after year by 10% which is fine going by past data but who knows what will happen in the future. For the placement to be accretive you are relying on the MSTR rising to >$800 (or more if STRK rises) and for people willing to convert and throw away the dividend they receive. I think people will end up holding the STRK stock and NOT convert even if MSTR rises above $800.
They have to pay a premium to buy it. So let’s say they pay 50% above premium. That means microstrategy can buy 50% extra bitcoin straight away. That is instantly accretive. Now bitcoin only has to rise like 6%-7% a year to allow microstrategy to be able to pay out 10% a year to investors and still profit. And yeah it’s a risk, but if bitcoin doesnt go up in price for the next 5-10 years then microstrategy will probably go bust anyway and something catastrophic will have happened to bitcoin. The risk with mstr is that you have to assume bitcoin will go up over time
I have 300 shares of microstrategy right now. I’m wondering if it would be makes sense for me to sell these and buy the preferred shares? I probably can do it through Fidelity, they did send me an email about the invitation to take part. But I don’t know does it make sense to sell regular shares to buy the preferred shares? I’m getting closer to retirement so the thought of a fixed income is nice, but I don’t want to be blowing my money!
@ There is a picking order in case of bankruptcy. Preferred is above regular shares. You might consider this. Not all shares are equal. On the other hand: how likely is that scenario, right? You can always consider partially adjustment. Doesn't have to be 100% reallocation. Things like that. It has to make sense in your situation.
@@bitcoinnotcrypto or it can work the other way and decrease volatility. I use MSTR for trading (I HODL BTC), selling recently around $360, I was debating whether to get back in when it dipped into the low $330s but I think I'll now wait until the results to see their plans.
Please make a video on how MSTR can survive a bear market in BTC (like a 75% drawdown we saw in the past) - probably the biggest concern anyone can have about the business
As a MSTR holder, we just wanna see the price go up, we don’t care about how much bitcoin he’s buying especially if we’re not benefiting from it, because when he had less bitcoin the price was moving up, make it make since
If you think that way, you should maybe re think being a mstr holder. Mstr is in an accumulation phase. It may take longer than a lot of people have the patience for to see the squeeze up and price appreciation that will happen.
@@bitcoinnotcrypto so how long is the accumulation phase if he says he’s never gonna stop accumulating, it does have to shoot up to $1000 right away, but damn we can even sniff $400 before it gets shorted back down
Mstr was over extended from the btc run from 75k-100k . Now it's accumulating drawing the 3XNAV to 1.8 NAV. MSTR's NAV will run up again as BtC makes it next move. Be patient or get out of the way!
@ thanks! This makes sense, not everyone understands these announcements or the moves being made, so we come to pages like this for clarity, that’s all!
![Noob To Max With DRAGON REWORK In Blox Fruits [FULL MOVIE]](http://i.ytimg.com/vi/LnBMOinoOvA/mqdefault.jpg)
Since I recorded this yesterday there has already been an update that changes some things about the offering. shares will be $80 and the deal is over prescribed so they now plan to offer 7.3m shares instead of 2.5m
www.microstrategy.com/press/microstrategy-announces-pricing-of-strike-preferred-stock-offering-strk_01-31-2025
Whilst it is useful having the extra cash to buy more BTC, it does raise the interest payments from 2.5m x $8 = $20m per year to now 7.3m x $8 = $58.4m per year (2.92 times as much). This has raised $584m instead of $250m (only 2.336 times as much)
There was no interest initially so they lowered the price.
I’ll take 8% guaranteed, paid on the certainty that MSTR will sometime in perpetuity reach $1k, in either shares or cash any day.
Thank you for helping shed some light on this, and for all your content!
I got assigned the STRK shares. Should I hold these forever or should I sell it when it goes up?
Immediately clicked - love your videos, very informative and direct
Top video! Lots of substance as usual
Please explain why this preferred stock offering is accretive? Let's assume MSTR share price remains at the same level. No one with STRK will want to convert to MSTR stock and MSTR can't force the conversion, then you just have the amount raised paying 8% (sorry that's now 10%) in interest ongoing. This would be a gamble that they are hoping for BTC to rise continually year after year by 10% which is fine going by past data but who knows what will happen in the future. For the placement to be accretive you are relying on the MSTR rising to >$800 (or more if STRK rises) and for people willing to convert and throw away the dividend they receive. I think people will end up holding the STRK stock and NOT convert even if MSTR rises above $800.
They have to pay a premium to buy it. So let’s say they pay 50% above premium. That means microstrategy can buy 50% extra bitcoin straight away. That is instantly accretive. Now bitcoin only has to rise like 6%-7% a year to allow microstrategy to be able to pay out 10% a year to investors and still profit.
And yeah it’s a risk, but if bitcoin doesnt go up in price for the next 5-10 years then microstrategy will probably go bust anyway and something catastrophic will have happened to bitcoin. The risk with mstr is that you have to assume bitcoin will go up over time
@@markdelej "They have to pay a premium to buy it" The buyers of the preferred stock actually bought it at a discount $80 instead of $100.
Because your shirt is the colour of money. Well unfortunately it is Fiat.
Thanks rusty! I'll put this towards getting a shirt the color of real money. Orange
Can I as an individual purchase thrse preferred through fidelity for my personal portfolio?
I believe you can although there is some kind of minimum purchase or amount you have to hold, not sure what it is
When do you expect Saylor to use the capital from the perpetual stock to make another btc purchase?
Great explanation! Thanks.
I am so curious what MSTR will be doing after they have accumulated and that bit is dialed down. What is the future vision, mission, goal?
I just interviewed Tim kotzman, video releasing soon and he had a great response to this. "Whatever they want"
I have 300 shares of microstrategy right now. I’m wondering if it would be makes sense for me to sell these and buy the preferred shares? I probably can do it through Fidelity, they did send me an email about the invitation to take part. But I don’t know does it make sense to sell regular shares to buy the preferred shares? I’m getting closer to retirement so the thought of a fixed income is nice, but I don’t want to be blowing my money!
@ Looking forward to it. :)
@ There is a picking order in case of bankruptcy. Preferred is above regular shares. You might consider this. Not all shares are equal. On the other hand: how likely is that scenario, right? You can always consider partially adjustment. Doesn't have to be 100% reallocation. Things like that. It has to make sense in your situation.
you can't buy it now because it's already too late. STRK will trade on Monday, and the price is adjusted, I believe.
Geez sounds like a ponzi
Let's hope others think so too, we need MSTR mispriced, we need more Volatility
@@bitcoinnotcrypto or it can work the other way and decrease volatility. I use MSTR for trading (I HODL BTC), selling recently around $360, I was debating whether to get back in when it dipped into the low $330s but I think I'll now wait until the results to see their plans.
@ 10-1 stock split would be ⛽️ 🔥 🚀
@bitcoinjesus420 probably once it breaks $1000/share
Short it.
Please make a video on how MSTR can survive a bear market in BTC (like a 75% drawdown we saw in the past) - probably the biggest concern anyone can have about the business
My biggest concern as well as my average cost is 370
No point bitcoins never going down to 25k. Not even close
This clip from my livestream addresses that somewhat ruclips.net/video/OPtZzZf5cSI/видео.html
The more established Bitcoin becomes, the less severe the drawdowns. I don't see BTC dropping below $75k ever again
@ Is 85K still possible?
I've been trying to find proof of reserves for MSTR...does anyone know where it is posted?
As a MSTR holder, we just wanna see the price go up, we don’t care about how much bitcoin he’s buying especially if we’re not benefiting from it, because when he had less bitcoin the price was moving up, make it make since
If you think that way, you should maybe re think being a mstr holder.
Mstr is in an accumulation phase. It may take longer than a lot of people have the patience for to see the squeeze up and price appreciation that will happen.
@@bitcoinnotcrypto so how long is the accumulation phase if he says he’s never gonna stop accumulating, it does have to shoot up to $1000 right away, but damn we can even sniff $400 before it gets shorted back down
Mstr was over extended from the btc run from 75k-100k . Now it's accumulating drawing the 3XNAV to 1.8 NAV. MSTR's NAV will run up again as BtC makes it next move. Be patient or get out of the way!
@ thanks! This makes sense, not everyone understands these announcements or the moves being made, so we come to pages like this for clarity, that’s all!