Strategy has undergone a name change and expanded its financial products while acquiring more bitcoin. The rise of bitcoin treasury companies has become prominent, following Michael Saylor's approach. An investigation reveals that the predicted operations of these companies may not align with reality. The bitcoin yield, touted at over 60% annually, actually comes from new shareholders, raising alarms about the sustainability of this model. The share price has remained flat, failing to vindicate previous optimistic projections.
The bitcoin yield - the increase in bitcoin per share - reaching old shareholders comes from the pockets of new shareholders.
The new shareholders, many of them buying shares in the hope of getting a high bitcoin yield themselves, provide the bitcoin yield either directly by buying Strategy common shares.
In December last year, the company seemed near invincible: With its bitcoin yield KPI accumulating at a mind-boggling annual rate of above 60%, optimism reigned.
Tragically few understood or even reached the most important conclusion of my December report, which concerns the source of the bitcoin yield.
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