Strategy’s Bold Moves Stir Debate

CRYPTO
Strategy’s Bold Moves Stir Debate

Michael Saylor’s Strategy (formerly MicroStrategy) has acquired over 506,000 bitcoin—worth about $44 billion—through aggressive financing strategies. The company raises funds by issuing equity, convertible notes, and most recently, preferred stock offering 8–10% annual returns. While these methods have fueled its massive BTC buys, they also pose long-term risks.

Bitcoin’s recent drop and the firm’s rising average purchase price have investors wondering how sustainable this strategy is. Though Strategy avoids using its bitcoin as loan collateral, its software business generates limited cash flow. Analysts say Saylor may need to issue more MSTR shares to cover dividends and interest, potentially driving the stock down. The firm also benefits from ETFs like MSTX and MSTU, which create constant buying pressure—but that may not last. If ETF demand dries up or the stock trades at a discount to its bitcoin holdings, pressure could mount to reverse course—selling bitcoin instead of buying. Strategy’s future remains high-risk, high-reward.

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TECH
xAI Acquires X for $33B

Elon Musk announced that his AI startup, xAI, has acquired the X platform (formerly Twitter) in an all-stock deal valuing X at $33 billion and xAI at $80 billion. Including $12 billion in debt, X’s total value reaches $45 billion. Musk emphasized that the futures of xAI and X are now closely linked, combining talent, data, and distribution to give xAI’s chatbot Grok a competitive edge.

This move also allows xAI to control access to valuable user data. Since Musk bought Twitter for $44 billion in 2022, the platform has undergone major changes, including staff cuts and feature overhauls. X recently raised $1 billion in new equity and is on track for its first year of ad revenue growth under Musk, with projected U.S. ad sales hitting $1.31 billion in 2025. CEO Linda Yaccarino called the xAI acquisition a bright step forward, as Musk positions both ventures for scalable future growth.

TECH
Biggest Tech IPO Since 2021

CoreWeave made its Nasdaq debut on Friday, opening at $39 and closing at $40 per share—below its expected range—after raising $1.5 billion in the largest U.S. tech IPO since 2021. The company, a cloud provider specializing in AI infrastructure, supplies OpenAI and counts Microsoft as its largest customer, contributing 62% of its $1.92 billion revenue in 2023. Despite surging revenue, CoreWeave reported an $863 million net loss last year due to its capital-intensive model and massive GPU investments.

The IPO was scaled down from an initial $2.5 billion target, reflecting investor caution amid a tech market downturn and macroeconomic headwinds. With backing from Nvidia, which also invested $250 million in the IPO, CoreWeave’s offering could ignite a wave of AI-driven IPOs. The company, founded in 2017 and based in New Jersey, had 881 employees at the end of 2024. Other notable investors include Fidelity and Magnetar, with Nvidia also serving as a major customer and supplier.

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.