Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

HSBC bans customers from buying Bitcoin-backer MicroStrategy shares

reuters.com

Post reply on HN
Print view View original

81–90 of 103 posts

Re: HSBC bans customers from buying Bitcoin-backer MicroStrategy shares

#81

Post by mrfredward »

noxer wrote: post #70
mullingitover wrote: post #34

Earlier quoted context omitted.

Tesla has a market cap of 673.80B at the moment. Their BTC holdings are barely a rounding error.

Comparing their asset balance with the market cap of its stock is complete nonsense. Tesla has 100% access to the BTCs and other asset it holds but there is no access to the market cap. Its a fictive price tag on all existing shares. People use it to compare companies. The money does not exist anywhere and certainly can not be used by Tesla.

>Comparing their asset balance with the market cap of its stock is complete nonsense.

Ben Graham, one of Warren buffet's mentors, wrote a famous book called the "Intelligent Investor" which has several chapters on doing exactly that.

Think about it...if a company sells $10 billion in stock, the new stock adds $10 billion to their market cap and they get an extra $10 billion in cash which goes on their balance sheet. And likewise, a company can buy back shares and the reduction in marketcap from destroying shares is equal to the amount of cash assets being removed from the balance sheet. There's a link here.

Re: HSBC bans customers from buying Bitcoin-backer MicroStrategy shares

#82

Post by sokoloff »

the_local_host wrote: post #63
wutXthree wrote: post #56

Earlier quoted context omitted.

Are you saying someone would need to post more than the value of the share?

> Are you saying someone would need to post more than the value of the share? Yes, as an alternative to not allowing the trade. If the bank considers something highly risky, it makes sense to protect themselves and the customer by making sure they've got some money locked up outside of the trade (a bankrupt customer is no longer a customer, after all). It would basically cap the percentage of net worth that they coul…

There’s no need for a bank to nanny their customers. If you don’t want to book the trade, don’t book it. Going beyond that in some tortured logic to ensure they tie up extra money (possibly incurring unjustified margin calls on other positions) has almost exclusively downsides for HSBC.

Re: HSBC bans customers from buying Bitcoin-backer MicroStrategy shares

#83

Post by sokoloff »

noxer wrote: post #80
JumpCrisscross wrote: post #76

Earlier quoted context omitted.

> Comparing their asset balance with the market cap of its stock is complete nonsense Eh, not really. They’re both stock (as opposed to flow) measures. And one is a subset of the other. That said, crypto as fraction of assets would be a more rigorous metric.

>And one is a subset of the other. Not alt all. Mark cap is a fictive value. Assets hold by a company aren't fictive and are not part of the market cap at all. Market cap is simply the price of all stocks at the current market price of one. >crypto as fraction of assets That would make more sense but also would need to include debts.

If Tesla announced it was going to sell all of its BTC tomorrow, would they get 100% of its notional value?

There’s a reason companies list “cash and equivalents” and BTC isn’t included in that line on the balance sheet.

Re: HSBC bans customers from buying Bitcoin-backer MicroStrategy shares

#84

Post by noxer »

sokoloff wrote: post #83
noxer wrote: post #80

Earlier quoted context omitted.

>And one is a subset of the other. Not alt all. Mark cap is a fictive value. Assets hold by a company aren't fictive and are not part of the market cap at all. Market cap is simply the price of all stocks at the current market price of one. >crypto as fraction of assets That would make more sense but also would need to include debts.

If Tesla announced it was going to sell all of its BTC tomorrow, would they get 100% of its notional value? There’s a reason companies list “cash and equivalents” and BTC isn’t included in that line on the balance sheet.

>would they get 100% of its notional value?

depend on the liquidity on that day also they could OTC sell so yes they can probably get the market price. However telling the market fist isnt going to help.

>There’s a reason companies list “cash and equivalents” and BTC isn’t included in that line on the balance sheet.

Yes, the reason is volatility and uncertain liquidity. To compare BTC with cash equivalents you could use volume adjusted price over the last months, that would give a good short term cash value. But long term ofc its impossible to know what it may be worth.

Not quite sure how that's relevant to what I said, namely that assets hold by a company are not comparable to the companies market cap.

Re: HSBC bans customers from buying Bitcoin-backer MicroStrategy shares

#85

Post by Alkim »

robjan wrote: post #33
gruez wrote: post #23

Earlier quoted context omitted.

I'm pretty sure bitcoin has less volatility than some of the meme stocks (eg. GME or AMC).

Meme stocks cannot be traded on margin by any sensible broker

Are you saying that trading on market sentiment is an invalid trading strategy?

Re: HSBC bans customers from buying Bitcoin-backer MicroStrategy shares

#86

Post by ptero »

niceairport wrote: post #21
ptero wrote: post #13

Earlier quoted context omitted.

Not impossible, but IMO highly unlikely: stocks, especially smaller ones can be way more volatile than any currency with over 1T market value. And you can still buy those on margin.

That's true. Maybe something to do with regulations then? HSBC is already being accused of being involved with money laundering quite a lot. Also, what other coins except BTC have market cap >1T?

I suspect regulation (or fear of impending one) is the likely culprit; but again, not sure. Re: size -- I was including regular fiat currencies, not just digitals.

Re: HSBC bans customers from buying Bitcoin-backer MicroStrategy shares

#87

Post by robjan »

Alkim wrote: post #85
robjan wrote: post #33

Earlier quoted context omitted.

Meme stocks cannot be traded on margin by any sensible broker

Are you saying that trading on market sentiment is an invalid trading strategy?

I'm saying that a broker will offer little or no margin on a meme stock

Re: HSBC bans customers from buying Bitcoin-backer MicroStrategy shares

#88

Post by randomopining »

cercatrova wrote: post #39
randomopining wrote: post #14

Banks are zeroes.

Very interesting seeing this here, I see this on Twitter mainly from a specific account.

Heh. The one that just changed their name recently? I still have a few ways of reasoning that they're wrong, but I feel like they're always right. I've been following since like 2015.

Re: HSBC bans customers from buying Bitcoin-backer MicroStrategy shares

#89

Post by Uw7yTcf36gTc »

londons_explore wrote: post #64
BelenusMordred wrote: post #45

Earlier quoted context omitted.

I don't see how kyc/aml applies to this particular stock over every single other ticker they will happily sell you? There's no difference, they aren't selling cryptocurrency here.

Buying or shorting this stock to the tune of billions of dollars might be a good way for a drug dealer to mitigate the currency fluctuation risk to his big pile of illicit bitcoins stashed under his bed.

Easier and cheaper to do with Bitcoin futures

Re: HSBC bans customers from buying Bitcoin-backer MicroStrategy shares

#90

Post by loceng »

wutXthree wrote: post #57
rawtxapp wrote: post #41

Earlier quoted context omitted.

Personally, I'm with you, I just don't see how Tesla's valuation is justified. Their cars have QC issues and they have very formidable competitors. If I had to buy a car, I'd pick the Porsche Taycan over any Tesla any time of the day (except maybe the Roadster, but it's not out yet). That said, I have a few friends who bought it's shares and their rationale is that it's a "clean energy play", far bigger than cars and…

Price is a function of supply and demand.

And decentralized demand - e.g. individual investors and institutions to a degree (individuals who give their buy-sell power to an org) - will be more accurately voting at least than say the gullible layperson buying into the Bitcoin hype-MLM; most people buying Tesla stock arguably mostly aren't betting/investing based on nothing - there are many good, valid reasons to see Tesla taking off exponentially and even owning 40%+ of the EV market - and they're optimizing for battery-solar tech and energy business as well.

P.S. I'm not trying to convince anyone here of Tesla's value, I've shared some of my thoughts before, and there are plenty other people who have done a thorough job detailing the ecosystem and its potential.

Post reply on HN