Most of you are acquainted with Microstrategy (ticker MSTR). Back in the Internet bubble, it was one of the poster children for the collapse, having plunged from about $3,300 to about 1% of that amount. It was absolutely catastrophic (and, to this day, I have no idea what products or services they make). Somehow they survived.
In recent years, they have re-imagined themselves as sort of a huge Bitcoin hedge fund, so they borrowed BILLIONS of dollars to buy up Bitcoin left, right, and sideways. You can, umm, see how that’s going so far. From last February alone, the stock has lost 87% of its value.
Looking at the entire history of MSTR, you can see that this wipeout isn’t as dramatic as the first wipeout, but they are wipeouts nonetheless. It’s incredible that Michael Saylor, the founder of MSTR, gets as much adulation and press as he does. This chart does not scream “success story”(although he somehow managed to accrue a fortune of half a billion dollars, perhaps, I suppose, by selling off stock to retail rubes).
I was reminded of all this because of something he tweeted hours ago……..
So, let me point out several things:
- His purchase amounts to 0.3% of his holdings, so clearly this is more for publicity than a serious investment expansion;
- He has been “averaging down” as BTC falls, which is pretty much Amateur Investor 101 type stuff;
- I would note that his average price of 30,664 is a full 50%+ higher than the present price, so he’s borrowed billions of dollars and is deeply underwater.
But Bitcoin is going to “moon”, right? Uh-huh. I think this scam’s days are over. Next stop: under $14,000.
If you want a laugh riot, just watch these two yammer on about Bitcoin from a conference a couple of months back (try to overlook the fact Saylor always sounds like he’s talking through a jaw that’s been wired shut). He mentions the appeal for “money managers who are managing hundreds of trillions of dollars.” Wow. What a genius.
