MicroStrategy (ticker: MSTR) CFO admits that MicroStrategy could face a margin call if Bitcoin falls below $21,000. In other words, it will need to put up collateral. As I said last year, MicroStrategy will likely be insolvent if Bitcoin was to fall to $10,000 and would have to raise capital, likely at very unfavorable terms, creating a debt spiral in which the stock will likely fall to double digits. The CFO’s remarks affirm this risk. MSTR is trading at $320, a decline of over $400 from when I began writing about it last year. Who would have guessed that investing in a company whose CEO is a fraudster and a drug addict would not end well.
I saw this going viral, from The Economist: Facebook’s retirement plan: What happens when the world’s biggest social network becomes its most doddery?
Again and again, the media keeps trying to predict the decline of Facebook. When will they stop trying. It doesn’t matter that Facebook is no longer hip or its growth has slowed. 1/4 of the world’s population is already on a Facebook/Meta-owned property, be it Instagram, Facebook, or What’s App. How much growth do you need when everyone is already on your platform? Facebook and Google together dominate online and mobile advertising. Facebook earns $40 billion in annual profit, about 3x that of Walmart (Walmart has much greater sales but much smaller profit margins). That’s the same amount as Elon’s purchase of twitter. You don’t need much growth when you’re one of the most profitable companies in existence.
Instagram and What’s App are where younger people are at. Older people are on Facebook, which makes so much money from these older users, who click those super-expensive ads such as for life insurance, annuities, ‘Wealthfront,’ or other financial products.
Investors consider Facebook unfashionable, too: its parent company, Meta, has lost 35% of its market value this year, including a plunge of $232bn in February, the biggest one-day drop in stockmarket history.
Yeah…except that the Nasdaq is also down 22% this year, indicative of overall market weakness and negative sentiment, not just limited to Facebook. And Facebook stock had already gained 900% since its IPO in 2012, at $38, which at the time the media also called overvalued, a bubble, and ‘a fad’. Great timing. Like democracy or abortion rights, Facebook is always on the verge of dying according to the media, yet never does.
Unless an article goes viral and is brought to my attention, I cannot recall the last time I read the Economist on my own volition..it must have been in 2007. Given that this is what passes for commentary, it would seem I am not missing out on anything.
The possible (but in my opinion, unlikely) overturning of Roe vs. Wade is just the latest media-manufactured crisis, replacing Ukraine, which stopped being newsworthy even though it’s still ongoing, which replaced omicron, which too is still ongoing. These crisis come in waves. Likely this too will pass. A search of headline archives shows that Roe has always been on the brink of being overturned, yet still hasn’t. Here’s one such story from 2005, which except for the dates, is a facsimile of the debate today in every other respect. One of the great American past times is obsessing over women’s reproductive rights. How many times are we going to let the left cry wolf on this issue. The fact that the stakes are so perceived to be so high (even though they aren’t) leads me to believe it will not be overturned. Technically, SCOTUS is not supposed to heed sentiment, the constitutionality or lack thereof being the sole deciding factor, but how can we know for sure?
The number of abortions performed annually in the US has been in decline for decades. The issue is not about abortion per say. The biggest proponents of abortion rights are women who are likely never going to need one. It’s more about the symbolic value that Roe represents. Just as the left is anti-Putin, not because they have a stake in the outcome, but because Putin is perceived as an extension of Trump.