[graeme]

Yup. In my view not super meaningful for the co’s holding bitcoin.

In, say, Microstrategy’s case, the market has entirely ignored any impairment announcements. This has been sensible I think.

(The market also has Microstrategy well overvalued compared to its holdings, but that’s another matter)

[qeternity]

> (The market also has Microstrategy well overvalued compared to its holdings, but that’s another matter)

That was the case and there was a great spread trade for anyone who had the stomach for it.

But currently MSTR is valued less than the value of its BTC, which implies a negative value for their legacy business.

[graeme]

You’re incorrect. They have about 110,000 btc I think, worth a bit over $7 billion. Their marketcap is $7.82 billion.

But they also have $2.2 billion debt. Legacy co worth about $500 million.

Add $1.7 billion to marketcap and you’ll see their bitcoin are valued at about $9.5 billion, a 30% premium. This has narrowed I think, they’ve been selling stock to arbitrage the difference.

[graeme]

I might be a bit off because the debt isn’t valued at par and they could presumably buy it back.

[NickM]

But currently MSTR is valued less than the value of its BTC, which implies a negative value for their legacy business

Or, alternatively it could also imply that the market thinks the future value of their BTC holdings will drop. It's still difficult and costly to short BTC directly, so I do wonder if negative sentiments about it might be reflected better in things like MSTR valuation than in the actual BTC spot price.

[Traster]

I also looked into this at one point, and MSTR value was so incredibly correlated with the spot price of BTC that it makes sense their results didn't imapct value - everyone knows their value is entirely BTC and are trading it as a bitcoin proxy. They don't need some earnings report. Although I wouold guess either a big buy or big sell reported in their reports would crash their price.