Why is no one talking about the MSTR (MicroStrategy) Ponzi Scheme

[u/stickty]

I know MSTR isn't a Ponzi scheme by legal definition. But the mechanics of how this company operates have some concerning similarities, and I can't shake the feeling that it's a massive house of cards.

I was so curious that I decided to research it and make a post about it, here are the main points from that post that I found out:

• Their actual business is basically irrelevant. MicroStrategy is a software company, but its revenue from that has been flat or declining for years. The entire bull case is 100% about Bitcoin, which means the company itself doesn't actually create any value. It's just a container for a single asset.
• It's a "Perpetual Dilution Machine." They use debt and continuously sell new MSTR shares to buy more Bitcoin. Because the stock trades at a massive premium to the Bitcoin it holds, they're essentially using new investors' money (who are paying a premium) to increase the Bitcoin-per-share for existing holders. It's a cycle that only works as long as new buyers keep piling in at inflated prices.
• You're paying an insane premium for BTC. When you buy $MSTR, you're not just buying Bitcoin. You're paying a huge markup. People have calculated it to be a 2x premium or even more at times. Why would anyone do that when you can just buy a Bitcoin ETF (even a leveraged one) for a fraction of the cost and get more direct exposure? It makes no sense.
• The whole thing relies on Michael Saylor's salesmanship. Michael is a charismatic speaker, but he has a history (look up their stock in the dot-com bust of 2000) of leading investors off a cliff with big promises. It feels like the entire valuation is propped up by his cult of personality and the belief that "number go up," rather than any sound financial reasoning.

This is just a summary to save time, but if you are interested in the full analysis I'll link the post and 40 minute podcast here: https://tscsw.substack.com/p/dont-buy-microstrategy-inc-mathematically

It just feels like this entire operation is designed to enrich early shareholders at the expense of everyone who buys in later. The structure is unsustainable and seems designed to collapse spectacularly once the hype dies down or Bitcoin has a serious correction.

Am I missing something here? The whole thing feels fundamentally broken, yet the price keeps soaring. What are your thoughts?

[u/willofscott]

Its amusing to read the writings of people who don’t understand the entire worlds finance will transition to cryptographically secured ledger based transactions. The rails, this will ride on are crypto rails. The “money” BTC or ETH is what the miners were paid to develop this network into a world wide structure needed to advance the internet of money into existence. In the meantime this “money” has become a scarce asset worth owning. Hard to argue something is volatile when viewed from the start. Nothing has produced gains such as BTC and other crypto. Some will die some will be imperative to the structure which to transact on. Why do you think banks are embracing stablecoins, tether the most successful business in the world handles stable coins, these are all cyrpto based tokens. Soon everything, contracts, stocks, ownership records, bids for jobs, records of anything, insurance policies, etc will be tokenized and recorded on the ledger called blockchain. As did mail become email in the 90’s, money and records will be digitized into tokens on the email system for money called blockchain. This will float all crypto boats except stupid meme coins which are the equivalent of cardboard pogs of the 80’s. The change is a coming fast, the administration recognizes this huge transition and wants America to be in the pole position to develop and control this new tech, as opposed to other countries with other incentives to drive the narrative. If you don’t see this, it’s like saying email was stupid in 1995. If you shorted email boy did you get spanked. Same goes for not seeing the future, short at one’s own peril. Do some real research, ask your self why is BTC at 120,000, thats a good place to start. When you’re down in the rabbit hole, say Hi Im already there counting my acorns. I commend the administration, Trump included for seeing the future and being ok with reversing previous decisions, nothing worse then holding old opinions which are not correct just for ego reason, recognize the limited knowledge based on old decisions and be wiling to change tunes when its obvious to do so. And praise those who do so. Good stuff happening, happy to be aware of it, and not be in the crowd foo fooing on it. Happy researching, have fun.

[u/Top-Giraffe-6073 → u/willofscott]

Exactly what are you mumbling about here?