What they actually did was issue debt notes, which cost interest to service, and which will be convertible to cash or Class A shares.
They borrowed cash to go long on leverage. This is exactly what margin traders do.
Oh interesting I didn't realize that.
I'm not worried for the company's risk though haha, they're already up like $300 million on their previous purchases. But good to know!
Yeah like I said elsewhere, I think Microstrategy will do just fine, simply based on their average buy price and where I think the BTCUSD market is headed in 2021.
But it's their sense of exuberance and urgency to buy BTC as quickly as possible (even if they don't have any cash to buy with) that is beginning to feel very greedy. Meanwhile, the Fear & Greed index has been in "extreme greed" for a month straight. Longs are edging up on Bitfinex again and swap funding rates are positive. And most people are of the attitude that breaking above $20K is more or less inevitable.
Microstrategy's greed just makes me reflect on how greedy the whole market feels right now. I wonder if that greed is going to be answered with a severe shakeout that punishes top buyers.