MSTR/BTC breaking 0.004 peg is a reminder to Saylor to leave some juice for shareholders; merely matching BTC performance is not sufficient

From the latest MSTR filing, we can impute that the average share price during the issuance period was $425.70. This implies that the issuance was limited to Monday alone.

Why did Saylor throttle the purchase amount?

Looks like he passed the threshold of what the market could bear. One way to look at that threshold is a ratio of 0.004 for (MSTR/BTCUSD) - a ratio popularized by Josh Man.

MSTR/BTCUSD for prior 3 months

Why would this ratio break now, you might ask.

Well, from someone buying MSTR for leveraged bitcoin exposure, who does not necessarily believe in the long term parabolic trajectory of the stock, said leverage has not materialized as of the beginning of Nov. In fact, since Nov, MSTR and BTCUSD have essentially had the same performance. For 6 weeks. When many rushed in.

It is understandable that some of them are moving on to instruments which provide more certain leverage, like IBIT options.

MSTR vs BTCUSD since Nov 1

This probably means little for the faithful who have held for a while. MSTR is still up 457%, compared to BTC's 119% over the last year. And they may see this as a BTFD opportunity. Nevertheless, worth remembering that past performance does not guarantee future returns, if MSTR keeps tracking BTC more at 1:1 and not 2:1.

https://preview.redd.it/jx478i98dn8e1.png?width=961&format=png&auto=webp&s=cef377a42498fb01a3a9b271e912d786bf8b89c1

For Saylor who still has 7B of the ATM remaining, this is a good reminder that he needs to leave some juice for shareholders too. Just matching BTC performance is not enough.

After all, MSTR is no longer the only provider of leveraged exposure to BTC in town.