Veteran investor Ross Gerber slammed companies like Strategy Inc. (NASDAQ:MSTR) for selling stock to the public to purchase Bitcoin (CRYPTO: BTC), warning that such an approach could “nuke” the cryptocurrency.
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Selling ‘Inflated’ Stock To Buy Bitcoin Is ‘Crazy’
In a note to Benzinga shared Friday, Gerber expressed his skepticism about companies issuing stock without a “real underlying business” to buy Bitcoin.
“The fact they can sell stock at some inflated valuation to then buy Bitcoin is crazy bad math for the investor,” the CEO of Gerber Kawasaki Wealth and Investment Management said. “Why would you buy $100 of Bitcoin for $200?”
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Notably, Strategy’s stock trades at a premium to its Bitcoin holdings, currently at 1.61x, suggesting that investors are paying a multiple for exposure to Bitcoin.
That said, Strategy’s Bitcoin yield — a …