1Wk·

Why is Microstrategy falling?

Is there a reason why Mircrostrategy $MSTR (-1.08%) is falling even though Bitcoin is holding up?

18 Comments

MC@Tokugawa

1Wk

Because it is overvalued in relation to the BTC value held per share to free BTC.

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Rocco@meisterrocco

1Wk

@Tokugawa Is this a new insight?

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MC@Tokugawa

1Wk

No. The impact is old. But it's clear where gravity is acting...

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Stefan21@stefan_21

1Wk

There is a rumor going around that Microstrategy is facing a tax bill in the billions because of its unrealized profits. But to what extent this is true - no idea. There was an article in the WSJ and Walter Bloomberg shared it on X.

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Stefan21@stefan_21

1Wk

https://www.wsj.com/finance/currencies/microstrategy-federal-income-tax-unrealized-gains-f60b2c04

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“Klaatu_Barada_Nikto!“@Ash

1Wk

@stefan_21 Unfortunately behind a paywall, but that's what I call a plot twist. 😂

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Patrick Schäfer@Hotte1909

1Wk

@stefan_21 Can they simply introduce a tax on unrealized gains? I mean, there is such a thing on ETFs, but they only hold bitcoins, right?

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Stefan21@stefan_21

1Wk

@Hotte1909 Exactly, they only have Bitcoin. I would also be interested to know what kind of regulation this is supposed to be😅 I can hardly imagine it

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Patrick Schäfer@Hotte1909

1Wk

@stefan_21 How can something like that be realized? Let's just assume that Bitcoin falls to 35k this year. Micro Strategie would then have a loss of around 50% on its equity. Do they then get taxes back on unrealized losses? What is the holding period for cryptos in the USA? Do you know that? Do they have the same thing as our global empire Germany?

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Stefan21@stefan_21

1Wk

@Hotte1909 I think the Americans differentiate between short-term and long-term capital gains and have to pay tax accordingly. I think 1 year or more is considered long-term and then the tax is lower. As far as that is concerned, we actually still live in a "tax paradise" here in Germany 😂😂

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Stefan21@stefan_21

1Wk

@Hotte1909 I briefly asked ChatGPT about the topic and this was the answer:
"Yes, in the US there is a tax on unrealized gains for corporations, which can also affect Bitcoin holdings. The "Inflation Reduction Act" of 2022 introduced the "Corporate Alternative Minimum Tax" (CAMT), which stipulates that companies with annual profits of over 1 billion US dollars must pay at least 15% tax on their adjusted book profits. This provision also includes unrealized gains on assets such as Bitcoin."

Given that the new accounting rules have been in force since this year and Bitcoin is always recognized at its current market value, this could theoretically already apply😅 I fear that this would jeopardize the business model somewhat

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“Klaatu_Barada_Nikto!“@Ash

1Wk

@stefan_21 Michael will probably have to call The Donald. 😂

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Patrick Schäfer@Hotte1909

1Wk

@stefan_21 ok. Nevertheless, I would assume that Saylor's boys must have known this and that it didn't come as a surprise to them. Or do you think they were so naive that they ignored it?

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Stefan21@stefan_21

1Wk

@Hotte1909 No, I don't think so. And if it did, it would be a bad entrepreneur. You have to be prepared for something like that😅

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