The Clock is Ticking with Michael Saylors Latest $21 Billion Bet Wreaking of Desperation…

Please, make it stop already…

Michael Saylor has spent years turning Strategy into a leveraged Bitcoin ETF with extra steps, and now the cracks are showing. The company dumped $21 billion into Bitcoin, and that investment is now worth $18 billion—a $3 billion loss on paper. And just like every overleveraged trader who thought they were untouchable, Strategy needs more money—fast.

(Source: Giphy) 

For some time now, Strategy’s entire gambling addition "strategy" was simple: raise money at dirt-cheap interest rates, buy Bitcoin, watch the stock price pump, use the inflated stock price to raise more money, and repeat. That worked when investors were willing to throw free capital at anything crypto-related, but now? Not so much.

In short, Strategy has already blown through 80% of its planned $21 billion in stock sales and is now scrambling to raise more cash under increasingly unfavorable terms. Instead of securing zero-percent convertible notes like before, they’re now offering preferred stock with an 8% interest rate—a massive shift that reeks of desperation. Naturally, the stock tanked 12% on the news, and if that trend continues, the entire model falls apart.

(Source: Trust Nodes) 

What’s more is that Bitcoin’s recent drop has only made things worse. Strategy bought 219,676 Bitcoin at an average price of $96,458 per coin, raising its total holdings to 499,096 BTC with an average cost basis of $66,357. Right now, Bitcoin is trading around $80,400, meaning they’re still technically in the green overall, but that doesn’t mean they’re safe. If Bitcoin keeps dropping, Strategy’s collateral for its loans weakens, making future borrowing even more expensive.

At the same time, the premium investors were willing to pay for MSTR stock is shrinking fast. Back in November, the stock was trading at a 164% premium to the value of its Bitcoin holdings. That premium is now down to 85%, and if it keeps contracting, the company’s ability to raise cheap money disappears. If the market decides that Strategy is just a leveraged Bitcoin ETF with no real advantage (which it is, fight me on it), the stock could get completely revalued downward, making it nearly impossible for them to keep this entire operation going. 

(Source: IBD) 

PLUS, adding to the uncertainty, the supposed Trump-fueled Bitcoin rally isn’t happening the way Saylor and other Bitcoin maxis had hoped. The White House crypto summit came and went without any commitment to government Bitcoin purchases. The much-hyped idea of a “Strategic Bitcoin Reserve” is still just theoretical, and even if it happens, it won’t be the immediate catalyst Bitcoin bulls were banking on.

There’s also speculation that the government could swap gold reserves for Bitcoin, but that’s a tough political sell, especially when the administration is also proposing Medicaid cuts. Without a government-backed pump, Bitcoin is left to fend for itself, which is a serious problem for Strategy.

(Source: Giphy) 

Meaning if Bitcoin doesn’t skyrocket soon, Strategy is in trouble. Their ability to raise cheap money is disappearing, their stock premium is shrinking, and if Bitcoin crashes, the entire balance sheet implodes. Michael Saylor bet everything on Bitcoin, and for a while, it looked like a genius move. But now, with the easy money gone and Bitcoin showing signs of weakness, the market is starting to question whether Strategy is anything more than a ticking time bomb.

So yeah, if Bitcoin doesn’t rebound soon, this could turn into a clusterf**k that nobody asked for. In the meantime though, gamblers are going to gamble—and as of right now, Michael Saylor is doing just that. Some may think he’s a visionary, and he could very well be—but his latest move wreaks of a slot machine addict that just keeps piling in for that next spin. Only time will tell if he ends up getting the jackpot, but for now please don’t take lessons from this man. Place your bets accordingly and stay safe and stay frosty, friends! Until next time…

P.S. $1.4 million, $1.02 million, $6.715 million and $25.3 million—these aren’t lottery winnings or Miami real estate prices… they’re all insider transactions that have gone down in the last week while retail investors were busy panic-selling everything. Want to track these corporate fat cats in real-time so you can pretend you're also an executive with material nonpublic information? (Legally, of course.) Click here to join Stocks.News premium while you still can…

Stocks.News does not hold positions in companies mentioned in the article.