- First, Michael Saylor bought Bitcoin.
- Then, over 100 companies copied Strategy's spending spre.
- Now, the short sellers sound the alarm.
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Hi! Eric here.
Imitation is the highest form of flattery, right?
In that case, Michael Saylor must be blushing like a raspberry, ‘cause a tonne of businesses are copying his crypto-buying playbook.
Over 100 copycats have added Bitcoin to their treasuries like Saylor’s software firm Strategy had.
On Tuesday, US President Donald Trump’s Trump Media & Technology Group announced plans to raise $2.5 billion to buy Bitcoin.
Memestock play
On Wednesday, GameStop, the video game retailer and memestock prototype, bought $500 million worth of the digital asset.
Others are also adopting a Sayloresque approach, topping up on everything from XRP and Solana to Trump’s official memecoin.
It’s easy to see why. Strategy’s shares have skyrocketed almost 130% over the past 12 months.
Indeed, Saudi-backed VivoPower saw its shares jump some 28% this week when it announced plans to buy $121 million worth of the Ripple-linked cryptocurrency XRP.
But sceptics are worried, as Pedro Solimano reports.
Firstly, they’re entering the fray at a much higher price point than what Strategy did when it started to buy Bitcoin in 2020. Back then, Bitcoin was worth $11,000, a tenth of the record reached earlier in May.
Secondly, analysts urge investors to look at the Saylor copycats’ net asset value, or NAV.
Mismatch
NAV is what a company’s holdings are worth on paper.
When there’s a NAV mismatch, it means a company’s stock price gets out of line with the actual value of what it owns.
Short sellers have zeroed in on Metaplanet for this very reason.
The Japanese firm holds 7,800 Bitcoin worth about $830 million. The company’s market capitalisation, however, is $4.7 billion. Earlier this week, 10xResearch analyst said this implied Bitcoin is worth about $600,000.
In other words, investors are paying fivefold the price of Bitcoin for indirect exposure to the crypto itself.
That NAV distortion could see Metaplanet’s shares — which are up 178% this month — reverse course at any moment.
“We’ve drifted far from Satoshi’s original vision of a truly peer-to-peer electronic cash system,” 10x Research wrote.
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