MicroStrategy at ATH

Good morning,

MicroStrategy just hit a four year all-time high!

A few months ago, I sent a newsletter sharing my investment thesis for MicroStrategy.

Since then, I’ve received emails from the GoBrr Community thanking me for the idea.

Now, those inspired by that newsletter are up 50%+ on their MSTR positions, and I’m thrilled to see that.

Of course, their gains or losses aren’t my responsibility—everyone makes their own choices—but it’s great to know I’ve helped people who are looking for bigger gains than BTC and steered them away from “slot machines” that rely on BTC dominance and other random factors.

Yes, MSTR is very risky compared to BTC, but it’s no riskier than any altcoin. My belief is that MSTR will perform so well that there’s no point putting your money into any other “shitcoin.”

For those who prefer a safer route, BTC is still a solid option.

Below, You’ll find my MicroStrategy Thesis.

Educational

The stock that will outperform Bitcoin

He is Michael Saylor, and he owns 1% of the BTC supply.

The shares of his company, MicroStrategy (MSTR), have outperformed Bitcoin by 3 times.

5 Reasons why I believe MicroStrategy is the greatest opportunity after bitcoin and how you can benefit from what Saylor does. 👇

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1. The Saylor Cult

What do Warren Buffet, Elon Musk, and Michael Saylor have in common?

They all possess a unique vision, which they constantly communicate in any circumstance.

Warren Buffet...

He not only offers reports on his company's financial performance.

He utilizes quarterly letters as a communication channel to convey more profound concepts.

These ideas cover a range of topics, from everyday life to more intricate economic concepts.

Through these letters, Buffet shares his insights on finances along with his thoughts on life, personal growth, and professional development.

This way of communicating has established a deeper connection between Buffet and his investors.

That's how he created his own cult.

Elon Musk's vision...

Is to make electric cars a norm and humanity a multi-planetary species.

This ambitious vision creates hope in those who follow him.

That's how he managed to create a cult around his name.

Michael Saylor...

...does the same, cultivating a cult that is growing larger with increasingly passionate people.

He participates in a multitude of events, podcasts, and interviews.

Through his philosophical, clear, and extremely easy-to-understand perspective, he inspires strong beliefs about Bitcoin in those who follow him.

This is how he develops his cult, which grows in direct relation to the interest in bitcoin.

If you are in this market, you have seen how much a large community of people who trust a leader matters.

The cult that M. S. forms increases the demand for MicroStrategy shares.

The funnel is as follows:

1. People discover Bitcoin

2. They discover M. S.

3. Some of them buy MicroStrategy (MSTR)

Price of Bitcoin increases, Price of MSTR shares also increase.

Price of Bitcoin grows, new people enter the market and discover Michael Saylor.

These people discover the possibility of investing in MSTR, consequently leading to further increases in the price of shares.

This is the positive feedback loop for MicroStrategy shares.

A loop that is based exclusively on Bitcoin's future performance and the education provided by M. S. .

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2. Accumulating Bitcoin with Cheap Debt

MSTR has access to cheap debt.

This is the big advantage it has as a publicly traded company.

Their accumulation strategy is based on this.

On average, they have managed to secure loans from the public with an annual fixed interest rate of 1.3%.

The total value of this debt is $3.604 billion.

These funds have been used to accumulate Bitcoin.

You might wonder, how did they manage to get such a low interest rate?

$500M of the debt has an annual fixed interest rate of 6.125%.

The remaining $3.100M consists of multiple tranches with annual interest rates ranging from 0% to 0.875%.

This type of debt is actually a bond called "Convertible Senior Notes."

Why is this investment option attractive to investors despite having a low interest rate?

For two reasons:

1. The risk is very low – in the event of bankruptcy, holders will be the first to be compensated;

2. It is a bond that in the future gives you the right to either recover your invested money + interest or convert it into company shares.

For example, the last time MSTR borrowed from the public by issuing this type of bond was in the first quarter of 2024.

At that time, they raised $601M at an annual interest rate of 0.875%, maturing by March 2031.

Holders of this type of bond, after September 15, 2030, can opt to convert it into shares.

The conversion will be at a price of $2327 per share.

If, after 6 years, when the bonds mature, the price of MSTR shares is above $2327, the holder can profit by converting them for shares and selling those shares.

Conversely, if the share price is lower, the holder can convert them back into cash, retrieving their initial investment along with the interest earned.

Investing in this bond allows you to gain from the company's growth while avoiding the risks of potential losses faced by other investors.

This is why it appeals to investors.

You may be wondering, how can you purchase this type of financial instrument that provides guaranteed returns without risk?

Well, you can’t.

This financial instrument is typically available for institutions.

As we can observe, this bond entails two types of costs:

1. An annual interest of 0.875%

2. Dilution of other investors if converted into shares

MSTR believes that Bitcoin is limited, and other assets are limitless.

They are confident that the value of Bitcoin will appreciate significantly,  surpassing the costs tied to this specific debt..

They rely on the fact that when the bond matures, it won't impact shareholders through dilution.

Over these 6 years, the rise in Bitcoin's value, combined with operational earnings, will make the share price high enough that the impact of these costs won’t be felt by investors (this is the premise MSTR starts from).

At the maturity of these bonds, MSTR can do the same thing again.

And as we can see, they are already doing this.

They started in 2020.

And it seems that this strategy is paying off.

In their latest financial report, they compare the growth in the amount of Bitcoin to the growth in printed shares.

While they have accumulated 13.3% more Bitcoin, they have "printed" 4.6% more shares.

As long as the value of BTC keeps increasing, MSTR can continuously refinance and accumulate.

With this strategy, MSTR has created a VORTEX, a black hole of the classic financial system that will suck and store real value by printing cheap debt infinitely.

Bitcoin is liquidity, the fiat system is debt.

Debt can be created infinitely, Bitcoin cannot.

Bitcoin is absolutely finite, everything else is infinite.

This is the premise MSTR starts from.

They print cheap debt for Bitcoin.

Bitcoin appreciates, MSTR refinances and accumulates.

The appreciation of BTC makes MSTR appreciate more.

Bitcoin is a vacuum for the value of infinitely printed money.

MSTR is the cleaning service.

I believe this is the greatest financial innovation ever created:

To print cheap debt infinitely to accumulate value in something rare and absolutely finite that appreciates far beyond the cost of debt.

Years go by, you pay off the debt.

The accumulated value has increased even more.

Based on this growth, you print more cheap debt and continue accumulating.

Continue the process until the increase in the stored value significantly slows down.

BRILLIANT.

This is what MSTR does

3. The MSTR Stock Premium

Stocks are generally valued in present, based on future expectations.

If the market is bullish, investors overvalue them.

If it is bearish, they undervalue them.

I will start detailing these investor behaviors.

At this moment, the price of MSTR shares is 1.68 times higher than the net assets it holds.

In other words, MSTR is trading at a premium 1.68X greater than the value of its net assets.

What does Premium mean?

If a company's price is higher than its net assets, then it means it is trading at a Premium.

This premium is set by the market based on its expectations.

In the case of MSTR, if Bitcoin trend is bullish, investors become more optimistic.

Thus, future expectations regarding the company's potential increase, and along with them, this Premium increases.

And vice versa.

Currently, if you buy MSTR worth $1000, you receive Bitcoin worth $600.

Because the price of MSTR is 1.68 times higher than the value of net assets (Bitcoin).

In the past, MSTR reached a Premium 6 times higher than the stock price during a bull market.

In a bear market, the company's shares have traded even below the level of net assets.

The Premium on net assets has traded at a historic low of 0.5.

In other words, you could buy MSTR at half the value of its net assets in the last bear market.

More clearly, in a bear market, if you bought MSTR worth $1000, you indirectly owned Bitcoin worth $2000.

In the future, if Bitcoin continues to rise, MSTR shares will most likely outperform its return due to this investor habit of valuing in present the future expectations.

And vice versa, if Bitcoin starts a bearish trend.

This premium is also driven by the strategy outlined in point 2.

Investors who understand that MSTR is a machine for accumulating BTC with cheap debt are willing to pay a premium in present for the expectation of the future price of the shares.

This premium increases with optimism and the rise in Bitcoin price.

This premium helps investors who have understood and started accumulating MSTR early to outperform Bitcoin’s price.

MSTR shares are much riskier than Bitcoin but not riskier than any other altcoins.

Besides the risk, their volatility is 2-3 times higher.

So you have to be mentally prepared for big dumps as well.

4. Short Squeeze

Not everyone understands Bitcoin, so not everyone understands what MSTR aims to do.

This is one of the reasons why approximately 20% of MSTR shares are shorted.

If Bitcoin price continues to rise in the coming period, these shorted shares will become fuel that will feed the fire of growth.

Why?

Because shorted shares are actually borrowed shares that are sold on the market.

If the price starts to rise above the selling level, those who borrowed the shares start to incur losses.

To reduce these losses, they are forced to buy the shares back.

Thus, demand and the price suddenly explode.

This phenomenon is called a short squeeze.

A short squeeze is when the price experiences a strong upward movement caused by traders covering their losses.

They do this by buying back the shares they initially borrowed and sold.

This happened with TESLA as well.

Financial institutions shorted TESLA for years.

In 2018, Elon Musk said it was the most shorted company in history.

Approximately 26% of the outstanding shares were shorted.

Since 2020, TESLA has been in an uptrend, and in 2021, it was included in the SP500.

This created a short squeeze that caused TESLA to have an extraordinary "pump."

Short sellers, to reduce their losses, were forced to buy back the shares.

This added fuel to the fire, and the stock price exploded.

There is a high chance that if Bitcoin continues to appreciate, the same thing could happen with MicroStrategy.

Traders who are losing due to the price increase will be forced to buy back the shares.

The short squeeze can fuel the rise of MSTR shares, just like it happened with Tesla and GameStop, and other companies.

5. Inclusion in the SP500

The SP500 represents a financial index that measures the performance of the 500 largest publicly traded American companies.

When you allocate money to the SP500, you allocate money to all these 500 companies.

Since adopting the Bitcoin standard, MSTR has made it into the top 500 American companies.

However, it has not yet been included in the SP500.

For a company to be included in the SP500, it must meet the following criteria:

• Be a US-based company;

• Have a market capitalization of at least $14.6 billion;

• Be highly liquid;

• Have a float of at least 10% of its shares;

• Be listed on a US exchange like NYSE, NASDAQ, or CBOE;

• Be profitable;

• Be a public company for at least one year;

• The majority of listed shares must be held by the public;

Once MSTR is included in the SP500, new capital from passive investors holding SP500 will flow in.

This capital will create additional demand for MSTR shares.

Anti-Bitcoin individuals who accumulate SP500 will be indirectly exposed to Bitcoin by holding SP500, and thus MSTR.

As with other companies added to this index, it will add fuel to the fire of growth.

Conclusion

1. The Cult of Michael Saylor

2. Accumulating BTC with Cheap Debt

3. The MSTR Stock Premium

4. Short Squeeze

5. Inclusion in the SP500

These are the 5 reasons why I believe MSTR has the best risk/reward ratio in the market.

Its risks are higher than Bitcoin and at the same time lower than any altcoin.

I wrote this entire text for myself to clearly understand why I should start allocating capital.

I decided to share it with you because it has educational value.

This letter is not an encouragement to invest in the assets presented.

If it helped you, hit "foreword." and share it with a friend.

Mr GoBrr

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.