I set out with the hypothesis that "MicroStrategy is a better buy than Bitcoin."
I didn't necessarily believe that, but I wanted to try to prove it, against my bias.
I compared MSTR with 4 of the darling Bitcoin Mining Companies, and measured how much Bitcoin I was acquiring per share of each company.
I then compared the cost of bitcoin to the cost of their shares, and normalized each companies share value to the # of shares required to be equal $-cost to me as an investor.
And then took the difference between the cost of investing in their company, versus the cost of just buying bitcoin.
Marathon Digital was the only compelling option. Costing just a $9 premium against the amount of Bitcoin you get per share.
But that's not the whole story.
I then considered each companies Debt, and how much of the total value of their company they owe in debt.
And since their entire game is buying or mining bitcoin, I checked their Debt-to-Bitcoin ratio as well.
Marathon, which could break even on share:bitcoin ratio in just a few days of bitcoin growth... would nevertheless still owe almost half of that value in debt!!
THEREFORE. As these companies must continue spending money to acquire bitcoin, it is natural that they will continue to amass debt, or have to earn money to pay it back, or have to sell bitcoin to pay it back...
It may be the case that the real value of these companies lies in market psychology, and the potential for leveraged returns vs. bitcoin.
But real/true value... Bitcoin wins, unless these companies generate cashflow through another means beyond Bitcoin, which can be used to pay off debts, to right the bitcoin:share ratio for the investor.
Have I proven that these stocks do NOT represent the value that purchasing Bitcoin directly does?
What mistakes did I make? Thanks for helping!
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