MicroStrategy Has Stock to Sell
Also divorce glitch, dividend adjustments, Trafigura’s Mongolia office, death elasticity, fictional hedge fund managers and a big Google fine.
A good corporate finance rule of thumb is, “if you run a company, and people are paying much more for your stock than it is worth, you should sell them as much of it as you can.” This rule can be hard to implement, though, for a few reasons1:
These problems are significant enough that I never really used to think about this. Like, “if people want to overpay you for your stock, sell it to them” is nice if you can do it, but it just doesn’t seem relevant to most companies’ lives. But the rise of meme stocks in recent years has changed that, and now I constantly find myself writing “well if people want to pay crazy prices for your stock you should sell them the stock.” What distinguishes a meme stock is probably something like “retail investors enthusiastically buy it at prices that its own executives think are nuts.” When the meme-stock wave first happened, a lot of companies didn’t sell stock, because the whole thing was too novel and nuts, but over time they adapted, and now GameStop is ready with an at-the-market stock offering whenever Keith Gill tweets.