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#Microstrategy #bitcoin #MicrostrategyDilution #MSTRPricePredictions

0:00 Intro

0:20 The opinions expressed in the video are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product. It is only intended to provide education about the financial industry.

0:50 MSTR BTC Purchase History to Date
92,079 Coins that cost $2.171 billion and an average purchase price of approximately $23,985 value today $3,774,747,915

2:00 Citibank Dec 2020 - MSTR at $290
I am jumping in hard with both feet in December 2020, when MicroStrategy announced its first convertible bond offering for the explicit purpose of buying bitcoin
Citi immediately downgraded MSTR to a “sell” recommendation

12,000 BTC from Junk Bond Issuance
22,000 from Stock Issuance

3:00 Total Holding could theoretically be 126,500 Bitcoin.
Per my math of no more than 14M BTC that will ever exist puts MSTR holding 0.9% of all Bitcoin.
MSTR BTC Plans $500M + $1BN
92,079 Coins that cost $2.171 billion and an average purchase price of approximately $23,985 value today $3,774,747,915

3:30 The first $425 million purchase was conducted with cash straight from the balance sheet
Also other purchases from FCF

3:40 The Bets - #1
92,079 Coins that cost $2.171 billion and an average purchase price of approximately $23,985 value today $3,774,747,915

4:00 The Bets - #2
2nd bet 650M purchase funded by large capital raise, offering 0.750% Convertible Senior Notes due in 2025 - Should bitcoin go to $0, company is stuck with $650m in debt and $50m/yr in cash
Conversion rate for the notes is 2.5126 shares per $1,000 ie conversion price of approximately $397.99 per share
This translates into a dilution of approx 1.63m shares on top of 9.62m shares outstanding
Investors' stakes will be diluted for a value of approximately $47

Super low interest

4:30 The Bets - #3
3rd bet 1.05bn raise convertible for cash or shares at a 50 percent premium in 2027
Zero percent interest!
We got time

92,079 Coins that cost $2.171 billion and an average purchase price of approximately $23,985 value today $3,774,747,915


4th bet $600M senior secured notes that are due by 2028 with an annual interest rate of 6.125%
Buying approximately 12,000 Bitcoin

5:30 The Bets - #4
Total BTC now - 104,000

92,079 Coins that cost $2.171 billion and an average purchase price of approximately $23,985 value today $3,774,747,915

6:30 The Bets - #5
5th bet $1BN of stock to be issued
# of extra shares 1.587m
1.587/9.62 million = 16% dilution
Note from a risk perspective the money is going straight into to buy Bitcoin - so risk is all bitcoin performance. Note BTC as gone up 31% in 5 days


Total BTC after #5 - 128,000

8:00 Summary of Where MSTR Could Go?
Key messages here are #1 I added my estimate of dilution and did not take into account 2027 dilution as I will be out of this trade by then. #2 new shares are 11.2M. New BTC is 128K. At a 60K BTC MSTR should be trading at at least $775, 80K 1004, 100K 1232 etc. A $1M BTC would put MSTR at 11,518 or up 1800% from today! It is an on ramp that most do not have so I expect a juicy premium as Hedge funds start loading up

9:00 MSTR BTC Risks
If third-party service providers experience a security breach or cyberattack, or if private key is lost or destroyed, MSTR could lose some or all of our bitcoin
The concentration of Bitcoin holdings enhances the risks inherent in our Bitcoin acquisition strategy
Bitcoin holdings are less liquid than cash
Bitcoin holdings could subject MSTR to regulatory scrutiny

10:00 Conclusion
A $1m BTC would put MSTR at 11,518 or up 1800% from today!
An on ramp that most don’t have, I expect a juicy premium as Hedge funds start loading up
There is always risk. DYOR
I am still long MSTR