MSTR Saylor sold 1.2M shares last week for over $400M and bought 4048 BTC. So, according to his statement back at the Q2 earnings release, Saylor evidently thinks the stock is currently overvalued and should be sold ATM.
In a sense, he is right: Each $1.00 worth of MSTR sold converts to $1.37 worth of BTC bought. So why don't shareholders follow his lead and convert their shares to BTC??? I would like to hear the explanation from Saylor as to why it's ok for him to sell the stock to buy BTC but everyone else should HODL.. Maybe because his "strategy" will not work otherwise.
MSTR There is another red flag against MSTR inclusion into the S&P 500: Around 10% of MSTR's float turns over everyday. That means every ten days the entire float of the company turns over to new shareholders. That is in the top 1% of velocity of S&P 500 member companies. Compare that to the average S&P 500 stock whose float takes 3-6 months to turn. Mega-caps like AAPL, AMZN and MSFT can take more than 12 months to turn their float.
Even TSLA, which had a lot of trouble getting into the index, only trades around 2-3% of its float on very volatile days during peak speculation. That is a float turnover cycle of 1–2 months, still much slower than MSTR on an AVERAGE day.
That makes MSTR look more like a meme stock (GME, AMC) or a commodity proxy (SLV, GLD) than a traditional operating company. That much churn makes it very liquid on paper, but also signals speculative trading dominates over institutional holding.
Money managers, especially the big index trackers, will worry that hyper-churn increases index tracking error and makes it harder to hold passively without getting caught in speculative squeezes.
MSTR’s float turning every 10 days is wildly faster than typical S&P 500 companies and puts MSTR closer to meme behavior than to a normal index constituent. That's another solid strike against inclusion in the Committee’s eyes.
MSTR To be clear, there is nothing in writing stating that MSTR meets the criteria for S&P 500 index inclusion, as the S&P Inclusion Committee has not yet commented nor signaled that they recognize "unrealized" earnings as genuine earnings. My guess is they won't because unrealized earnings can be wiped out the very next quarter if Bitcoin takes a big dive, which historically has happened once or twice a year.
The committee will be very hesitant to include a company that might have large unrealized losses the following quarter because Bitcoin was simply doing its thing by fluctuating (high volatility). Doing so would place undue burden and rebalancing costs on money managers that maintain index baskets.
Inclusion would almost certainly draw pushback from money managers, especially the big passive players, because it introduces a volatile, non-traditional asset proxy into their portfolios. The Index Committee has leeway, and they’ve used it before to delay “problem children” like Tesla. MSTR could easily fall into that category. For Tesla, they wanted to see 4 consecutive quarters of GAAP earnings subject to corporate tax.
You can bet that the committee is already hearing from fund managers asking that inclusion be delayed as long as possible. Or forever. Their argument probably goes “this is essentially Bitcoin exposure inside the S&P 500, and it creates volatility and rebalancing headaches without adding representativeness of the U.S. economy.” The S&P committee will be well attuned to those arguments, because the money managers that track the index are what makes it a popular yard stick to begin with.
Bottom line: The committee has the discretion to disregard unrealized gains. They own the sandbox and they make the rules. They can interpret “quality of earnings” however they like. It’s not a formulaic process; it’s a judgment call and excluding MSTR will bring about fewer headaches for them than including it would.
MSTR Lawsuits I could look up: It seems Pomerantz dropped, not sure about Levi & Korsinsky or Bronstein, Gewirtz & Grossman. If we could get all lawsuits dropped, Join S&P, Global Liquidity to break it's recent high after taking a breather, and Sept rate cuts (maybe some QE?), that might be a nice break.
MSTR One down, several more to go, AFAIK. Or... are we done, here? The Google is unclear. ___________________ Yahoo Finance: "Aug. 28 brought a massive relief to Strategy (Nasdaq: MSTR) as investors who filed a class-action lawsuit against the leading Bitcoin treasury firm in May decided to drop it, Bloomberg reported. As reported earlier, a plaintiff named Anas Hamza filed the suit against the company, earlier known as MicroStrategy, on May 16 for allegedly making misleading claims about its Bitcoin strategy."
MSTR So, MicroTragedy could only raise $47 million via preferred stock offerings (much less than anticipated), and will now resort back to issuing more common stock to raise additional funds for more bitcoin purchases! Meaning more share dilution is back! WHAT A JOKE.
MSTR Saylor sold 1.2M shares last week for over $400M and bought 4048 BTC. So, according to his statement back at the Q2 earnings release, Saylor evidently thinks the stock is currently overvalued and should be sold ATM.
