I penned the piece regarding MSTR over the weekend and it was coincidentally prescient. How could I have suspected a dilution event the next morning? After all I am just some schmuck with a laptop and ham radio of a podcast.
Well there is historical habit:
MicroStrategy invents a new way to dilute shareholders with STRK
Every MicroStrategy Investor Should Keep an Eye on This Number
My next estimation is that MSTR and Michael Saylor will get a margin call of some sort. For those not familiar with the scheme, I will offer an analogy.
You own a home appraised at $1M without a mortgage, free and clear. You are so sure NVDA will keep going higher so you begin getting home equity loans to buy triple levered NVDA ETFs. As NVDA goes higher, you keep pulling equity of out your home to buy the NVDA 3x bull etf. Even as the NVDA etf falls, you convince the bank you will Dollar cost avg and buy more and more and more. soon you have a 10M loan on your 1M house. But now the house prices begins to fall along with the price of NVDA.
That is MSTR
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