Interpreting the latest financial report of MicroStrategy MSTR: Currently holding over 250,000 BTC, financing 42 billion magnesium within three years, increase the position

MicroStrategy plans to finance $42 billion in the next three years to continue increasing BTC holdings to enhance financial flexibility and market competitiveness. This article is from the MarsBit column article 'Not Producing, Just Hoarding Coins': MSTR's latest financial report reveals MicroStrategy's capital thickening and high premium valuation model,' compiled, translated, and written by Block Beats. (Background: MicroStrategy Announces Major Move: Raising $42 Billion to Buy BTC in the Next Three Years! Moving towards BTC Bank) (Background: Is MicroStrategy's 'Leveraged Long' BTC Really a Good Strategy?) In history, when a traditional industry reaches its peak, some breakthrough companies often emerge, finding a unique 'production method' in the market's crevices, attracting capital with unique strategies. These companies rarely 'produce' actual things but concentrate resources on a core asset—like Shell Oil Company in the past maintaining valuation through oil reserves, or gold mining companies dominating prices through gold mining and reserves. In the early hours of this morning, MicroStrategy's financial report was released, once again showcasing such a company: not known for 'production' but breaking traditional valuation rules with massive investments in BTC, becoming one of the world's largest and most unique BTC holders. From a software company to a BTC Whale: MicroStrategy's transformation journey MicroStrategy, stock code MSTR, was originally built on business intelligence software, but founder Michael Saylor stepped on the gas pedal in 2020, directly entering the 'fast lane' of BTC. Since then, Saylor has not let the company stay in traditional 'production' but has seen the potential of BTC as a core asset, gradually converting the company's reserves into BTC, even risking his own fortune, step by step turning MicroStrategy into a 'Coin Hoarding bank' for BTC. In Saylor's eyes, BTC is the digital world's gold, the anchor of the global financial future. Some think he's crazy, some call him a 'BTC evangelist,' but he firmly believes he's securing a 'new gold standard' for the company. Saylor doesn't plan to follow the old path; he positions MicroStrategy more like 'air freight': compared to traditional ETF's 'ground logistics,' MicroStrategy directly purchases BTC through financing, borrowing, equity issuance, etc., flexible, efficient, and able to chase the BTC market's trends. This not only makes MicroStrategy a stock code but also a 'fast target' in the BTC market, directly linked to BTC's price fluctuations. Saylor's actions have caused controversy, with renowned investor Peter Schiff even mocking on social platform X, 'The company doesn't produce any products but achieved a high Market Cap through hoarding BTC.' He pointed out that MicroStrategy's Market Cap has exceeded most gold mining companies, second only to Newmont Corporation. In response, Saylor simply stated, 'BTC is our future reserve asset.' With this firm belief driving them, MicroStrategy has accumulated over 250,000 BTC and plans to finance $42 billion in the next three years to continue increasing holdings. MicroStrategy's 'production' method is not traditional material manufacturing but building a new financial system around BTC. Some say Saylor is gambling, but perhaps this is not just a bet but a belief. He has ventured down an alternative path, making MicroStrategy a unique target in the financial market. As he said, 'We don't produce, we just 'hoard coins.'' MSTR's latest financial report interpretation: capital thickening and further BTC reserve additions 1. Overall financial report overview and financing plan MicroStrategy's financial report released this time shows expected Favourable Information. The company plans to finance $42 billion in the next three years to continue increasing BTC holdings, while also completing the repurchase of previously staked BTC. As of the financial report date, MicroStrategy holds a total of 252,220 BTC. Since the end of the second quarter of 2024, the company has added 25,889 BTC, with a total cost of approximately $1.6 billion, at an average price of $60,839 per BTC. Currently, the company's total Market Cap is approximately $18 billion, with the accumulated cost of purchased BTC at $9.9 billion, an average price of around $39,266 per BTC. The company raised $1.1 billion through the sale of Class A common stock and raised $1.01 billion through the issuance of convertible bonds due in 2028, while also repaying $500 million of senior secured notes, releasing all BTC assets from collateral. This release of collateral significantly enhances the company's financial flexibility and reduces its risk in extreme market conditions. 2. Cash reserves and future financing targets MicroStrategy currently holds $836 million in cash, providing stable financial support for future BTC purchases. The company has also announced phased financing targets: $10 billion in 2025, $14 billion in 2026, and $18 billion in 2027, totaling $42 billion. CEO Michael Saylor's plan aims to strengthen the company's core asset reserves by gradually increasing BTC holdings, which the market undoubtedly views as Favourable Information rather than negative news. 3. Market Cap and book value As of October 29, 2024, MicroStrategy's Market Cap is approximately $18 billion, with a book value of $6.9 billion, excluding $3 billion in accumulated impairment losses. The impairment was not due to MicroStrategy selling BTC but based on book adjustments under current accounting standards. According to accounting rules, if the market price of BTC falls in a quarter, the company must reduce the book value of these assets and record impairment losses. However, even if the price rebounds later, the book value will not automatically recover; it will only reflect appreciation upon sale. If future accounting standard changes (e.g., FASB's fair value measurement adoption) are implemented, this issue may be improved. 4. Flexibility advantage of BTC as a core asset BTC provides MicroStrategy with higher capital operational flexibility compared to Spot ETFs. The company operates its BTC reserves as oil companies operate oil reserves. Just as oil companies handle unrefined and refined products (such as gasoline, diesel, aviation fuel), MicroStrategy also views BTC reserves as a capital preservation tool, allowing the company to enhance productivity and implement innovative financial strategies through this core asset. 5. MicroStrategy's BTC holding principles MicroStrategy has established eight core principles for BTC holdings, reflecting their...