Nice to meet you.
Let's go.
Hey, you.
Look at them yo-yos, that's the way you do it.
You play the guitar on the MTV.
That ain't working, that's the way you do it.
Money for nothing, hurt me just for free.
Now that ain't working, that's the way you do it
Let me tell you, damn guys ain't dumb
Maybe get a pistol on your little finger
Maybe get a pistol on your thumb
We got some install microwave ovens
Custom kitchen deliveries
We got some movies, refrigerators
Woo! Here we go. All right.
It's True North, episode 55.
We are back.
We're weathering the storm.
We've got the crew here today.
We are going to rip it up.
We're going to talk about digital credit.
We're going to talk about Amplified Bitcoin.
We're going to talk about securities, Bitcoin, macro environment.
We've got a whole bunch of things we're going to talk about today.
And for those of you that are new here, this is True North, the investment-grade Bitcoin
podcast.
And we've got Mike, Grain of Salt, Soleil, Dan Hillary.
I think Mason Ford is going to join and pop on as well.
He's kind of in and out, but he's got bad internet.
And yeah.
Okay.
So we're going to work through that.
All right.
I guess first thing, we'll kick it off with a little bit of Tim.
Ladies and gentlemen, what you're about to hear may be amazing, but it is not financial
advice.
It's for informational and educational purposes only.
boom there it is uh everything we're going to talk about is for fun and not financial advice
we're going to talk a little bit about uh the earning strategies earning call we're going to
talk about bitcoin thinking about how to value a amplified bitcoin company or a as soleil called
it last week a continuous capital raising company a ccrc and we'll think about you know valuations
How do we think about the PREF equity? How do we think about what this looks like on the horizon?
Think about the entire market as a whole macro. What's on the horizon here in the next couple of
months? We've got a potential new chairman of the Fed, Kevin Warsh on the horizon. We've got a Fed
meeting in what, like about 35 days. It's one of Jerome Powell's last couple of Fed meetings,
anticipation for reduction in interest rates on the horizon. AI is ripping through everywhere.
Clodbots are all over the place. Everybody's trying new different AIs. I feel like every
single AI you use is outdated as you start using it. I mean, Dan, I've seen you now post about
every single one of these AIs. Every week, you're like, oh my God, Opus 4.6 is incredible.
and you were doing Opus 4.5 like the week prior.
So the world is changing so fast and we're here to try to unpack it.
So I'm going to kick it over to, I guess, Soleil.
We'll start with you.
What are you thinking about?
What's on your mind throughout this week?
Man, Jeff, I'm all bulled up.
And when I say that my life has never been better, I mean that literally.
So let me know.
Have you guys seen Office Space?
Yeah, absolutely.
So it's an absolute classic.
if you haven't watched it, like your homework is to watch it. And without giving too many spoilers
away, the main character at the beginning, he's talking to his therapist and he said, look,
ever since I started working, every day was the worst day of my life. And the therapist is like,
well, what about today? Is today the worst day of your life? And he's like, yes, it is.
And I mean, it's kind of relatable, you know, maybe not Mason, because he's only ever had a
Bitcoin job. But for the rest of us, we work our butts off and your wealth is just being destroyed.
It's being debased. So the harder you work, the poorer you get. And Bitcoin inverts that.
And you can literally just buy Bitcoin and get off zero and you become wealthier every day for
the rest of your life. Even if you stopped working, your Bitcoin would continue to gain value.
And so instead of like every day being the worst day of your life, once you buy Bitcoin, every day is the best day.
It's just going to get better every single day.
And it's just got me super bullish.
And I'm ready.
I'm ready to go.
That's a great, that's a really great framework rolling into this, especially you think about it for your person.
And then you think about it for a company as well.
I mean, I was working in traditional finance for 11 years. What I thought was like a very
important job, like looking back at it, you know, I have a different perspective now, but
I was working harder and harder and harder. I was working 80 hours a week. I was working on
all these different deals. I was struggling to get ahead. I felt like I was just constantly on
this rat race and I was getting tied up with these golden handcuffs of like, oh, hey, we'll give you
this dollar denominated bonus four years from now.
If you work here for four years,
I'm like, this doesn't make any sense.
And I just kept getting tied up into it.
And I truly have never been happier working here.
I mean, the volatility is crazy,
but having a baseline and thinking about Bitcoin
as savings vehicle, long-term savings vehicle,
I'm just happier than ever working here.
So yeah, great framing.
Well, kicking over you, Dan, what are you thinking about?
look I mean stretch hit par at 100 today with Bitcoin at 68 000 67 000 I thought that was quite
remarkable um I think that's quite remarkable and I think you know I was working through some of the
financial derivatives you can build on stretch you can transfer kind of yield to like a someone who's
looking for safety and someone who's looking for for more risk and more return I think I think
stretch is going to be the bedrock of a lot of stuff like obviously I'm building a stable coin
backed by stretch. But I think people are going to build ETFs on these things. People are going to
build banks that hold a portion in these things. There's pref ETFs that are backed by this stuff.
Like Bitcoin will just be the bedrock of the financial system. And yeah, I mean,
the price action is terrible, so I totally get it. But to lighten people's spirits,
if you look at the daily moves of MSTR relative to Bitcoin over the past couple of weeks,
it's starting to trade like it did in 2024 for the first time in a long, long time.
because when Bitcoin goes up, it actually goes up too.
So something to look out for.
Most bottoms have been marked by,
I mean, I've been calling for a bottom for the past three months,
but most bottoms have been marked by MSDR outperformance
relative to Bitcoin.
Yeah, yeah.
Bottoms have no bottom.
The MSDR I-bit ratio, yeah, moving up,
like trending and breaking out, right?
Which is weird.
You would think if everyone's,
if the institutional investors who actually move the price of MSDR,
It's no one on Twitter.
You would think if they were very bearish on Bitcoin, they would be selling MSTR to a discount.
Because people have to remember, if Bitcoin goes down forever, then MSTR will go down faster.
So therefore, there shouldn't be an MNAP premium.
There should be an MNAP discount because the leverage cuts in the opposite direction.
However, people are obviously assigning a premium to MSTR right now, more so than they have in the past few months.
And that's a good thing.
So, I mean, just excellent game theory there.
thinking through it. It's the, if institutions thought MSTR was going to break, it would just
keep going down. I mean, the takes on X are ridiculous, right? People are like, oh, I'm
getting that, uh, tingling in my plums, thinking about FTX collapse and like, you know, just like,
oh my gosh, they can't look at the balance sheet, right? Like we talk about this literally every
single week. They've got $48 billion of net capital on their balance sheet against $8 billion of debt
that they can refinance and $8 billion of PREF equity. And I mean, how much capital have they
raised in Q1 already? It's like billions of dollars of capital that they've already raised in Q1.
So yeah, I mean, it's just crazy out there, the takes of everybody thinking this strategy is
going to go out of business. It's just asinine. And then you look at the product like Stretch,
like that's it. Like that's what we talk about today. Stretch hit 100 while the underlying
collateral has dropped 30%, 40, 50, actually 46% since the all-time high back in like what,
October, November. And their instrument is trading at par. Like that is a signal that people believe
in the security of Bitcoin being around for the long term. And this is something I just keep
hitting on is that the market doesn't understand the risk of these things. I'm personally trying to
build a risk framework of what this looks like, trying to wrap your head around it because there's
so much data here. There's so much data looking at these preferred instruments that has never
existed before compared to any of these other traditional debt instruments. And you could start
to build entire risk profiles thinking about like historical backtesting. Okay. What would it have
done historically? And you could go look at that performance. What would it look like on a future
basis? Like take some assumptions and play with those assumptions based on history, based on
future expectations. Take all of the Bitcoin on-chain data, decipher it with an AI computer.
Like we have the power to do that stuff now. Get an understanding of your view of
the future adoption curve of Bitcoin, right? And the supply curve is fully calculable.
And the supply doesn't change as the demand increases or decreases.
That is fundamentally different than anything else that's ever existed before.
And you can underwrite that. That's so underwritable. And I just think people are just
largely missing this and nobody is pricing the risk appropriately or even thinking complex about
the risk um do we get there maybe not i don't know but i think there's a lot to do on that front
maybe computers just do it without thinking about it i don't know fun stuff dan actually question
for you have you looked much at the options market on on stretch or these other preferred instruments
they're pricing the forward rate of the dividend as about 10 11 annualized so they're pretty
efficient right now i mean the spreads are super wide so for anyone watching like all the strategy
preferreds except strike that's strk have an options market which is pretty interesting
so you can hold your your product and sell covered calls and get even more yield if you if you so
choose but um the way you price an option on a instrument that has a dividend is there's a forward
value of the option based on the dividend annualized over time blah yada yada yada essentially
it means the puts are more expensive than the calls. That's all you have to know. And
if you look at the options market on stretch, that is the case. You know, the 100 strike
calls are very cheap because obviously sailors selling the 100. But anything below the puts
are, you know, look, it's like 23% annualized volatility. And most options are valuable
because of the volatility, the underlying equity. And the volatility on the presser
still is actually quite high. It's almost as high as gold and Bitcoin. So what that
means is the options are pretty expensive. They're illiquid, but they're very expensive.
And so I think if you wanted to,
this is an interesting trade idea,
not financial advice,
but one way to go levered long on any of the prefs
is you can just sell the put option,
which is the right to purchase it at a lower price,
which gives you essentially exposure,
dividend equivalent exposure
because of the way the options are priced
based on the dividend to the underlying security.
So instead of having to go out
and buy a bunch of STRF to collect the dividend,
you can just sell the put.
with much less capital and have price exposure and appreciation if strife doesn't go down too
significantly. So- Especially if you're willing to buy it. Yeah, right, right.
Yeah, exactly. It's like a capital efficient way to get the dividend exposure to one of the
instruments. Capital light. Capital light, exactly. Capital light. Leverage heavy.
All right. I like how you think, Dan. All right. Over to you, Mike. Or go ahead, Dan.
Yeah, yeah. Actually, no, I'm done talking about that. I'll hop in after Mike.
Yeah. Mike, what are you thinking about? You're grinding, you're pounding the pavement on the
silicone. What's cooking? Yeah. So look, when I write an article for X, I have to have a thought
where, you know, is it defensible? And I want to put something out that can stand scrutiny.
So when it comes to AI, I'll dream up my own idea. I'll do a framework. And Jeff, you're like me.
We could do it in Excel or Google Sheets with an idea, rows and columns, come up with an idea.
And then we plug in some formulas, numbers, assumptions, come up with something.
And then what I do is then I stress test it in two or three different AIs after it comes out.
Does this hold up for scrutiny?
So by the time I post it and somebody comments on me, it's already been stress tested.
That's what I use AI for.
And people are like, you know, I don't think what people get about AI is this.
If you ask AI a simple question, you get a simple answer.
If you ask AI a complex question, you get a complex answer.
And so the more complexity in your prompts or the more complexity in the spreadsheet that you build, and then you ask the prompts for it, you get a much better return.
And I know this is true because I see people using, I told people, use the AI of your choice for my last, the article I wrote last night.
And this one guy kept on posting it into Grok.
and it was it was brutal how terrible he was at prompting it right and yeah and grok in the
comments is like uh you know dumb grok like it is comment grok is dumb grok like you if you want
the real stuff like you got to go prompt it in the and you by the way if you buy a paid for version
you get a different version for 20 i pay the 20 a month i don't get paid by chat gpt i don't get
paid by perplexity or Claude. Claude is free though. But I've tried, each one has a, is,
I use different ones for different purposes. And it's just not one is, they all have different
designs. But anyway, so my takeaway for this is that AI has, has made me more balanced because I
don't, I'm not scared of posting something because I've already stress tested it. So I think that's
my big takeaway. And then we'll talk about my model coming up, what I worked on. But I'm looking,
I just want, are you guys going to be in Las Vegas? Is there anything going on there?
Oh, yeah. Let's hit on Las Vegas. Boom.
That's a good idea.
We should go to Vegas.
Dude, we should all meet in Vegas, right?
We should meet in Vegas. We are having an event at Strategy World in Vegas. It is coming up in
the next couple of weeks. It is Monday, February 23rd. If you are interested in attending, go to
our website, mstrtrtrunorth.com forward slash event. If you click the event tab up here at the
top, you can have the ability to go get tickets here. This is going to be a high alpha, high
signal event. It is not going to be recorded. There is going to be opportunity to network with
people that are operating in the industry. The True North team will be there. A lot of
of C-suite level people from Bitcoin treasury companies will be there. You'll have operators
at a bolds bracket bank. You'll have custodians. You'll have trading platforms that are operating
in the space. So our goal is to really shine a light into what is actually happening behind the
scenes with these Bitcoin treasury companies, companies that are holding Bitcoin. How does it
work? How does securitization work? How do banks think about these things? How does trading,
like how do you go from buying Bitcoin to put it in custody? What does institutional custody
look like? How do we think about that? How do companies manage these things? And we're trying
to shine a light into that. So if you're interested in that stuff, this is going to be the only place
you're going to be able to hear about it. You're going to hear about it at Strategy World as well,
but this is going to be like very focused for our event. We have a preliminary schedule here
and it looks something like this. We've got a bulge bracket bank. Barclays is going to be there.
James Lavish is going to be talking about macro from the BTC Opportunity Fund. We have Anchorage
Digital. We also have BitGo. Mike Belshi, CEO from BitGo is going to be there. And then we also
have somebody from Kraken coming. We've got BitWise is going to be in the house. Matt Hogan,
CIO at BitWise. So good perspective of being an investment officer. Ben Workman, CIO of Strive.
So a lot of people are going to be in the room talking about what is actually going on behind the scenes here
There's also a networking and after-party event from 8 to 11 p.m.
This is the location. It's at Gatsby's in Las Vegas. It's going to be a great time
You're going to have to have a wristband to get in there. There's only 33 tickets left
And yeah, look forward to seeing you all there. It's going to be a great time. We had a great time last year
I think it'll be even better this year
You guys got anything else to add?
Can't wait.
Yeah, I think it'll be fun.
Yeah, and I've said this before.
If you want to meet Sailor or Fong or Andrew Kang, the exec staff, or Strive, these people will be there.
You get to meet them, and you get to talk to them.
It is completely different meeting them in person than it is just watching a video from them.
It really is, because you can just ask them and say, well, what do you think about this?
and see the reaction. So I think it's great. Yeah. And the reality is we cover a lot of things and
we're like trying to stay at the knife's edge of what's happening in this industry. I mean,
I'm working for an operating company now thinking about this entire world and I see the world a
little bit differently. Dan, you do the same. Soleil, I know you're constantly thinking about
these things. So we can address all the questions that come in the comments here. And that's a great
place to do it. Like have those conversations. I love meeting all the people in the space.
and it's a great time.
So we can commiserate over the sucky prices
and then think about what these should be worth
in the future.
Good stuff.
Yeah, you know, we had talked about this previously, Jeff,
in 2024 and I showed it, the price of,
it just barely hit $2,000.
This is pre-10 for one split prior to May 1st.
And then the price, it dropped 50% on May 1st of 2024.
And I was there and I was like, wow, this is, you know, kind of, you know, did I know
that it was then going to do a 10 for one split and then do a 4X in August for the rest
of the year?
No, I didn't know that.
But I still went to the event, met the people, and it was an awesome event.
And then I was there, obviously we were there last year.
We did our you know our inside event last year and then we now following it up now So I could not imagine that this would have transpired over two years There just no way Oh yeah The landscape has changed so much And I mean Mike to your point
let's see, Strategy World was in May of 24. That first one you went to is May of 24.
The price of MSTR went from, what is this, $45 to $1,900.
It went from $450 to $1,999.99.
They came back down around $118, even bottomed here around $100.
A lot has transpired since then.
I mean, strategy at the time held about 100,000 Bitcoins.
Now they hold 714,000 Bitcoin.
And the price is very similar to where it was then.
and we've never seen this business model work. The PREF amplified, the amplified preferred equity
business model work in a bull market. This is back in the era of convertible bonds. This is
even the convertible bond era that we have yet to see this puppy turn and go to the upside during a
bull market. So I'm excited about that. I'm bowled up. I think this is a great opportunity. The
balance sheet has never been healthier. You are seeing signals in the market with stretch trading
at 100. They're likely selling shares of stretch today. So bringing in more capital to buy more
Bitcoin. That's incredibly accretive to the common stock as they're able to buy Bitcoin.
You've got to think about, they've got to pay dividends on that PREF equity into the future,
but any gain on that Bitcoin held over and above the interest rate payable is effectively going
right directly to the common stock shareholder. How'd Saylor explain this? It's like the thermodynamics
dynamics of volatility. Like if you slice off the volatility, you strip off the volatility
to the upside on stretch and you strip off the volatility to the downside on stretch,
that excess volatility is transmuted over to the common stock. It doesn't just disappear,
it goes to the common stock. So to the extent that there's been a significant drawdown in MSTR,
there's a lot of excess volatility from the preferred equity, the $8 billion of preferred
equity instruments that they've issued in the last 12 months in the common stock. But as that
flips and turns the other way, that excess leverage starts to look really attractive,
in my opinion. I mean, Dan, you're pulled up on MSTR right now too, right? I mean,
you're thinking long-term here. Yeah, I think MSTR is good here,
especially because I think Bitcoin is depressed in terms of price. So if you think Bitcoin is
the present of the price.
I mean, it was cheaper relative to book value
a couple of weeks ago,
but Bitcoin is a little more expensive.
So, I mean, you're getting at like 1.8,
1.18 times MNAV with like massive leverage,
33 amplification.
So, you know, it's definitely significant
Bitcoin outperformance.
Hey, can I switch to a quick,
I did three surveys, show you the results
and I can show you what the current sentiment is.
Let me do it. Let me figure this out here.
Share screen.
Okay. Share this window. Let's see if this works.
Aha. It does work. So I did three different polls. I did this poll over here. Does MSTR
retake all time high in 2026? And 51.9% said yes. Okay. And there was almost 1,200 votes.
so that's a decent sample size right yeah yeah now what's really interesting is that and this
is where people this is where i always get the comment from the person with like 32 followers
that's been on x for three months um does bitcoin retake the all-time high in 2026 i had 615 votes
and the yes was six almost six 64.4 percent of course i always get the person that's like dude
are those the same people that vote in both of the polls? I'm like, I don't know. It's freaking,
I'm just telling you what the sentiment is, right? And they're like, well, how do you pick? I don't
pick any of these people. It's whoever wants to respond back and vote. And then Michael Cantrell,
who's been on TV like a whole bunch of times, I just met the guy recently online, never in person.
And we talked about the Goldilocks and that that's over here. And I did this one. It kind of
worked out this way, but not this way. So Goldilocks means, just like it says there,
the US economy is in Goldilocks phase, which you have steady growth, low inflation,
strong jobs, and neutral rates. That's like pure Goldilocks. So are we in pure Goldilocks, 21%?
Close to it, but soon is 29%. And then you have no, meaning inflationary. And then you have no,
meaning recession. Well, it's kind of crazy that this came out 50-50, right? I mean, it's crazy
that each category was almost precisely, it was pretty close. It's pretty close in the middle and
then you have like your little bell curve. So I think that that's kind of odd. Again, you know,
the same person, you know, different people are always like, oh, are all these polls with all the
same people? I'm like, no, I don't know. It's just a sentiment indicator. And so anyway, so
So I put this together to see how things are going.
So do I think, am I bullish?
Yeah.
Do I, you know, am I bummed about the price action?
Absolutely.
So hopefully that helps.
And then can I switch to a quick history lesson?
Yeah, ribbit.
So let me do if I, let me do this.
Share screen, share window, this window.
So Jeff, we had talked about this.
I wanted to figure out a valuation for strategy. So I started looking through the decks because I
wanted to kind of figure out what happened in the past. But this ended up being really interesting.
And I'll show this because now when we begin to think about things, it's kind of weird that it's
like that. I know these are kind of small. So in Q3 of 2020, this was the first presentation
where it was after they started buying Bitcoin, right? Because they bought it in August and then
the presentation for the Q3. Yeah. Can you zoom in a little bit? Let me see how to view.
That better? Yeah. Yeah. So in their presentation, they were still talking about
analytics market and cloud growth. Over here, they talked, they have a proven history of free
cash flow, right? And then when you get to this section over here, it has a unique balance sheet
strategy that uses Bitcoin to provide asymmetric upside and energize new investors.
And there's like one other mention of Bitcoin in it. That was it. So you look at that, you're like,
oh, okay, wow, they were just getting started. This is the part which I kind of didn't realize,
which is kind of crazy. Let me move back over here. So in the Q4 2024 financial results,
right over here, February 5th of 2025, they use this use use of excess cash to acquire more Bitcoin.
You're like, okay. And that's Q4 2024. The crazy part is when you get to this one is that
the new strategy website did not go live until January of 25.
So when we talk about Bitcoin per share and all of these metrics,
the first KPI for that was here.
It basically came about in this presentation over here.
And it says Bitcoin.
Let me zoom in.
you see it says incremental, incremental Bitcoin accretion per share through purchases using excess
cash. That happened in fourth quarter of 2024. So when we talk about Bitcoin per share,
it's, it's five quarters old, right? It's the last quarter of 2024. And now we're in the first
quarter of 2026. So they just started doing this. And then they came out with this website because
everybody thinks, oh, well, Bitcoin per share, this has been around. Nah, no. The website didn't
come about, was announced on February 5th, 2025. One, less than a year ago, right? Or just about a
year ago, it says introducing the new strategy website. That's when they introduced it. So when
When we talk about Bitcoin per share and all this stuff, and by the way, Fong uses the term seasoning.
He goes, oh, well, these instruments have to be out there.
When we talk about Bitcoin per share, this metric is really not that old as a metric.
So, of course, we all get this and we all get MNAP.
But when we go talk to like the normies, they're like, dude, I have no idea what you're talking about.
And part of the reason, because this is relatively new.
And I think now when you look back at this in retrospect, oh, their dashboard website didn't go live until whatever, January of one year ago.
I thought it was been alive for two years.
But when you check the presentation, so is this surprising to you guys?
I'm just imagining explaining this from where they're at today to one of my friends that's never heard about this.
I wouldn't even mention Bitcoin per share.
You know, it's like I need to get over the Bitcoin hump first.
Yeah. And so when you look at this crazy stuff, I'm going to show one more thing.
Let me pull this up. And I think when you look at the, you know, you go to the strategy presentation, you know.
Earnings.
Earnings. The earnings present. It is so much better than what it used to be.
you cannot, this is the one showing that, you know, season, again, here's the word,
seasoning of digital credit. You know, this word is seasoning. I didn't come up with the word. Fong
is using this word on TV because stretch is only been around for one year. Sorry. Stretch IPO was
July of 2025. It's not even a year old. Right. So that's why that term is seasoning. We're hearing
that in the news. And then I want to go to this. This is when they launched everything. So STRF
went live in March of last year, March 21st. So STRF isn't even a year old yet. And STRD came out
in June, right? And STRC came out in July. So people are like, oh, well, it hasn't ramped up.
It's like, really? I'm like, I don't know why people assume this. And then you get to these
other crazy numbers, but I want to go to this. This chart is crazy right here.
You know, what I was posting, and if you look at the end of Q4 of 2023, that was the tail end
of crypto winter. And in Q4 2023, they had sub 200,000 Bitcoins.
and now they have over as this deck it's whatever 714 000 now but did i think that they were going
to acquire 500 000 bitcoins as the price rocketed up no there's no way i looked at these decks again
yesterday and the day before and there's no way i could conceive that they would acquire 500 000
Did you guys think they would acquire 500?
They acquired, if they had 200,000 Bitcoins in Q4, they had 189,000.
They acquired more than double the amount of the previous two and a half years with a higher price.
Is that absurd?
Yeah, no, it's totally absurd.
I mean, back when they were holding 100,000, I thought, oh, wow, maybe they'll get to 200.
And I was like, it might take a decade.
And here we are with 700,000.
It's moved a lot faster than I anticipated.
And they're able to build an entire industry on top of it.
You know, one of the criticisms that I've really disliked throughout this whole thing is like,
oh, wait till they can build or they can, you know, create products using this capital.
It's like, that's what the prefs are, right?
Like they're, they're using the capital to issue these instruments and they're taking on risk by
issuing the press. And then somebody else put on your, um, Bitcoin per share. Like it's not a good
metric in the pref era. Well, I mean, even in the convertible bond era, you could think about
Bitcoin per share, but you'd need to think about like the, the, uh, basic and then the diluted and
then the diluted varied. So you could even say that Bitcoin per share and the convertible bond
era was kind of a tricky metric. I do agree there are some challenges with identifying how much
Bitcoin exposure, but ultimately, in my opinion, it's about how much Bitcoin exposure is there per
share. It's like not Bitcoin per share. It's like Bitcoin exposure. How much excess volatility
is shoved into the common stock? The more perpetual preferred equity at the issue,
They're shoving more excess volatility into the common stock.
And I think that's why they use this Bitcoin per share metric is because it's it's a proxy
for shoving that excess volatility, shoving that excess volatility into the common stock.
I like that evolution that you showed, Grain, where they were talking about their positive
cash flow.
and now that's definitely not something
that they just hammer at their earnings calls now
because they're beyond that stage.
It reminds me a little bit of that kids game.
I don't know the one you've seen
where kids will roll a wheel
and keep it going with a stick
and chase the wheel.
Have you seen this one?
And that's kind of what the cash flow positive
reminds me of.
You only need a little bit of that cash flow positive
to keep the wheel going
and then the momentum does everything else, right?
So if you don't have the cashflow
to even start buying Bitcoin
or to get the convertible bond thing going,
then you're kind of dead in the water.
But once this gets ramped up and it gains momentum,
the cashflow positive part becomes,
you know, a footnote in the story.
Yeah, it's really because they've created this vehicle,
right, that you see on the screen,
this image here, right?
You've got the battery being the USD reserve, and then you've got the nuclear core, which
is the Bitcoin that's held there, that really powers the vehicle into the future.
But the cash was effectively like pulling down cash flow and holding it for a period
of time into the future.
Yeah.
And going back to what you guys are saying, first of all, a lot of people don't like this
slide.
And I'm like, I love that slide of the rocket ship.
because freaking Michael Saylor is a real MIT rocket scientist.
Let's be realistic.
But what I'll say is that why are markets hard to trade
or why do they invest?
And Fong said this again on TV.
He goes, look, originally we were buy and hold Bitcoin.
That's what happened in 2020.
And I didn't check to see when they started doing the preps.
Sorry, not the preps, with the converts.
Once they did the converts,
They were like, oh, we could lever up a little bit with converts.
And they started doing that.
And it's like, oh, we could acquire more Bitcoin faster in the capital markets.
Then what happened is it's like, oh, you know what we, so then obviously the market ran up.
The last convert they issued was in January of 2025.
And then they came out with the prefs in, like I just said, in February of 2025.
And so what happened is now everything is different.
Again, it's like the converts.
Oh, they had to be Delta hedged.
And there's these convert guys that do it.
They totally get how this works.
And back then, it's like, wait a second.
Strategies is able to sell converts and the coupon is 0%.
He's borrowing money for 0%.
And I'm like looking at it.
Listen, you morons.
He's giving a 40% upside on the conversion.
So it's built into it.
It's kind of like, hey, you want to go buy a product on eBay?
and they're like, oh yeah.
And you're like, do they charge for shipping?
So I'm like, oh, they don't charge for shipping.
Let me tell you a secret.
They just increased the price of the product
to include the shipping.
It ain't free.
It's rolled in.
Yeah, it's rolled in.
So the coupon, oh, he's borrowing money at 0% coupon.
He just gives you a 40%,
he has to give a 40% upside after the term.
And that's built, like if you click the PDF
and you read it for 30 seconds, you would see that.
but they don't even click the link. So now where are we today? Now we're in this third scenario of
any, the STRC has seasoned. So now it's the third environment. The convert environment is over.
Initially it was buy and hold Bitcoin. Fong said that. Then it was the convert market. Now it's
the PREF market. And if somebody is like, can you tell me how the PREF market's going to affect
MSTR? You know, I have some good ideas, but that becomes hard to model. Take it away, Jeff.
Yeah. And some other new evolutions that are happening in the space, and I've seen this happen
with some of the shitcoin debt companies. And now I think MetaPlanet, their recent equity issuance
used this model as well. They sold equity at a premium and had warrants attached to it as well,
which was an interesting model. It's effectively selling your equity at a premium and then having
a call option attached to it. I don't know the exact details. I haven't looked incredibly deeply,
But that's another interesting model that, you know, companies are finding other ways to issue equity at a premium by attaching little pieces and components to it.
So just something to think about.
But another thing, I was listening to a Bitcoin Today space and they were all fumbling on what is so fascinating about Stretch.
Like, why is it cool?
Like, what is the novelty here?
And I think it's helpful to just reiterate, preferred equity has been around for a very long time.
This access to the capital market has been there for a very long time.
Historically, preferred equity used to be the last resort.
You'd go raise debt capital, and then you'd go to the preferred equity market if you couldn't raise debt capital anymore.
And it was seen as a desperation move to go access the preferred market.
Now, strategy has completely flipped that on its head and used it as a position of strength.
Like, okay, how can I take infinite duration leverage, no margin call, like no principal due,
I can do it in the preferred market. Okay. Innovation number one. Innovation number two
is you put a ticker on it and you make it publicly traded Okay If you wanted to go buy like Boeing perpetual preferred equity you can trade it It trades 144A You like you got to go to a broker and go trade back alley to go get some
pref equity exposure or go buy like PFF, like a preferred equity ETF. Basically it's illiquid.
It doesn't trade, but these instruments are so sexy. Lots of people want these,
like not just institutions, like normal people, normal people want to think about this as like
a savings account because this is backed by Bitcoin risk. I'm long Bitcoin exposure here.
I can effectively have a theoretical type savings account or like a two month, three month type
savings account in a, in a wrapper that's publicly traded and I can get it on Robinhood.
I can get it in any of these brokerages. Okay. That's interesting. Now on top of that,
they have a ATM, a shelf offering, and they're able to issue new shares of this stuff,
which effectively is why STRC was able to be created because they can issue shares to peg the
price at a hundred and they could raise that debt like capital without having a cliff maturity
with a click of a button, very low cost. They don't have to go back out to market and go do the,
you know, song and dance and go like make a bunch of presentations and go run around the world and
go find preferred equity buyers. They're building the demand as we go. And they have the ability to
tap into that demand as it comes in the door. So that's why these things are so interesting.
It's all of those components. It's like took an area of the capital markets that was historically
just kind of drab and not very exciting. And they made it incredibly exciting by making it
publicly traded, throwing a shelf offering, making a unique instrument that's relatively
stable, low vol with high yield.
I mean, these things are better than like, look at this.
So on the screen right now, STRC is seasoned trading near par.
It hit par today.
It hit 100.
Interest rate, 11.25%.
But at the same time, since August, the value of the underlying Bitcoin that sits on the
balance sheet has gone down 30%.
Yet the instrument itself is up a point, 1%.
And the dividend itself is up 5.3%.
They've issued an additional $400 million of this stuff.
It's crazy.
Yeah.
And I want to say why I think this is why they label this the iPhone.
People ask this question.
And the reason why on the other prefs, they have a fixed dividend.
I don't use the term coupon because Saylor doesn't like the term coupon.
That has a particular legal meaning.
So it has a, it has a, the yield that it pays is set at 8%, right?
On the other ones typically.
And so what happens is the price is able to float.
What they've done on STRC, if you can go back to that slide, slide 61, what they do here
is they have two levers.
It has a floating, it has a floating dividend rate that can be, that's changed based upon
the VWAP at the end of the month.
and that's where they're able to,
A, if we want to keep this target range,
and that's the term they use, target range,
99 to 101,
then what they do is if the VWAP is too low,
then they ramp it up a quarter point
or they can go up a half a point.
Now, as long as there's more demand for this,
what they're going to do
is they're going to continue to sell it off
to keep it in that target range of 99 to 101.
That's the goal.
So they want to keep that rate relatively high.
And Jeff, we went back, we talked about this.
What happens if STRC dropped to 50 bucks?
Well, at 11, just assume 11%,
if you could buy it at 50 bucks,
automatically the effective yield would be 22%.
Because instead of it being at 100, we have 50 bucks
and they have to pay out these dividends
at an 11% rate based upon that par value of $100.
and that's straight bonds.
And so when we have these commentators
that make these flippant remarks
or these people with 100,000 or 150 or 200,000 followers
and they don't get what strategy is doing,
I'm like, well, that's obvious, right?
And after a while, it's tiring.
But the problem is they have 150,000 or 250,000
or a lot of followers
and they just don't get what he's doing.
Oh yeah, it's crazy.
um like this is the most interesting interesting story in all of finance like these are interesting
stretch a perpetual preferred equity i mean today it hit par and it traded 97 million dollars
today like that's interesting what other perpetual preferred equity preferred equity
is trading 100 million dollars a day there isn't one like it just doesn't exist like if you want a
yield instrument and want liquidity associated with it on one specific thing that like these
are it like this is it so it's uh yeah i mean these these products are fascinating very uh
very interesting to analyze can you go to can you go to slide 22 yeah so you know you know look on
slide 22. Look, I think the reason why people don't get this is not because it's complex,
because it's dead freaking simple. And people just, they just can't, they're like, it can't
be that simple because the mindset is it must be too good to be true. So when you look at this
slide right here, strategy was the largest US equity issuer in 2025. That's what it says.
Are they allowed to lie in an SEC deck?
No.
So let's just take it at face value.
They were 8% of the equity market.
Total equity raise, they raised $23.3 billion.
They were 6% of the common-
That's an insane statistic.
You look at these, any person will look at this and they're like, oh, hey, Saylor, do
you think you can raise $888 million to pay the prefs?
Well, we raised $23 billion last year.
Maybe we'll peel some off and buy cash, right?
Well, the dude did that in January and you go to the rocket ship and they have $2.25 billion sitting in cash, 30 months of paying the preps.
So I don't think you could raise money.
It's like –
So in 2025, they raised 26.2 times the annual dividend interest.
Yeah, and they're like –
26.
Yeah, and I want to jump into this last part.
There are people, so this is what's been going on on mainstream media.
It's like, so Fong says this.
And by the way, I think Fong was like, hey, could you guys get into trouble?
He's like, well, yeah, if Bitcoin drops to $8,000, which is a 90% drop, and it stays there for five years, you know, we'll probably have to refinance.
And people are like, you see, you see, they're going to get in trouble.
I want to tell you something.
If Bitcoin drops to $8,000 and stays there for five years, I'm not going to be talking about Bitcoin.
I'll be like, I think we're all, I'll tell you right now, I will give up on this show
if Bitcoin drops to $8,000 for five years.
I'm not going to be in this call waiting for it to come back.
That's fair.
Okay.
Just give you guys a heads up.
Yeah.
That was so funny.
I mean, they bring Sailor and Fong on those shows like when things are down, right?
I guess they bring them when things are ripping too, but like-
So I don't know if I told the story.
So in 2024, I was there.
This was in public.
First time I met Saylor.
And I ran up to him after his presentation.
We're at Strategy World.
There's a whole group of people around us, not a private setting.
I walk up to Saylor.
I don't know if I think maybe I don't know if I told him.
So I walk up and said, hey, I'm grain of salt.
You ever hear me?
He's like, no.
I'm like, OK.
Anyway, I said, can I ask you a quick question?
He's like, sure.
I said, look, Andrew Ross Sorkin.
I think he seems like a sharp guy.
He doesn't get what's going on.
Does he not get what's going on?
or is there something else going on?
He's like, they get what's going on.
He goes, look, they call me when the price is down.
They can't have, Andrew can't say to them,
hey, Saylor, how's the Bitcoin thing going?
You know, it looks like it's going up pretty good.
And Saylor's like, oh yeah, I'm buying a lot of it.
I think it's going to go really high.
And like, oh, that's awesome.
Oh, that's cool.
He goes, it doesn't work like that.
He goes, they can't say that
because then they'll be accused of just pumping up
the price of Bitcoin or MSTR.
So when they come on, it's good cop, bad cop.
I didn't invent this.
Ross is bad cop.
Andrew Ross Sorkin is bad cops like Saylor, you know, how can this go wrong?
And he's like, well, it can't because of all the metrics we just talked about.
And then they're like, oh, so Saylor is playing good cop.
And these people on mainstream media play bad cop.
And that's the routine.
This is not lying.
But I just want people to realize he said this in front of a whole group of people.
This is not like this was a private conversation.
And I'm like, oh, and I'll let you guys know.
when executives have to do a press release they run that through pr and legal for like three weeks
before it goes out and usually legal writes the press release then the executive looks at it's
like do you agree with the executives like well yeah if legal approved it looks pretty good right
jeff i mean yeah yeah yeah it's crazy out there uh the it was sailor was there he was brought on
one of the shows and it's like they asked okay if bitcoin goes down to five thousand or to eight
thousand will you be able to refinance the debt like will the bank still lend to you and there's
just like oh my god i just can't believe we're here like people still think that this is the
case like that that that's the highest probability like the the questions that they ask make it seem
like that's the highest probability outcome you know without thinking about the future like the
upside exposure. Jeff, let's go to this slide here because this is what people keep on saying.
They always get wrong. They always get this wrong. Oh, strategy is leveraged to the hilt.
You hear this all the time. Strategies leverage is 10%. And they're like, you see, he's 90%
leverage. I'm like, what? That's what people think. They cannot understand this. We talk about
this every week. And they're like, no, strategy is 10%. AAA rated is 23.1%, right? And then the B
is 31%. So they have the lowest leverage out of all these comparisons. And you look at this and
they're like, oh no, he's leveraged to the hilt. It's like, I guess they can't... I don't know how
they maintain their composure when they keep on getting the same question over and over again.
yeah yeah yeah going back to that 20 billion that they raised in 2025 it took them like 10 years to
raise two or three hundred million right for them to get to the half billion that they had
when they started this strategy like it took them 10 years to come up with half a billion dollars of
cash and since they started the strategy now they're just like yeah we'll just raise 283
billion dollars of uh you know to buy bitcoin with every year in a year in a year yeah in a year
yeah now they do whatever 500 million to a billion in a week it's like oh exactly in a week and you're
like it's truly absurd so going through this deck is is crazy i mean yeah the deck's important one
one other thing i wanted to talk about is uh i don't know i gotta jump here in like six minutes
because I've got a meeting tonight that I got to jump to.
But there was a lot of complaints this week
about strategy selling common stock last Monday
and buying Bitcoin last Monday.
I think they bought, what, they sold $90 million
and they bought $90 million worth of Bitcoin
and the average price was 78,000.
But at the time when the announcement came out,
Bitcoin was trading at 67,000, 68,000, something like that. And people exploded, right? Like,
oh my God, buying the top. Why didn't they buy when it was 60,000? Why aren't they buying the dip?
But it's like hindsight's 20, 20 in all of this stuff. Strategy is not a speculator.
They are a long-term investor. When they get the capital in the door, they are deploying it
immediately. And just to give some perspective of kind of like how this works, like, yeah,
like when you get the capital in the door, like you can go clear, you can clear $90 million in
the Bitcoin market. Like they could have done that in an hour. Like that Monday that they bought
that Bitcoin, I think Bitcoin traded like $70 billion that day. So the ability to go deploy
that amount of capital, like $90 million is just not that big of an order to clear in the market.
So I'm not surprised that Monday morning, the stock opened strong and they were able to sell
equity into the market. And they turned right around and probably had a TWOP for two or three
hours to clear the $90 million. And boom, they had the Bitcoin immediately on the balance sheet.
And I don't think they're not speculators. I don't think they want to be taking on
price volatility risk in any one direction if the price of the stock goes a different way or the
price of the Bitcoin goes a different way. All of a sudden, the economics that made sense when you
originally sold the stock may not make sense anymore. And people can complain like, oh,
why aren't they buying it over a week? Well, if you're buying it over a week,
you're taking on timing risk and timing element risk of your entire calculation
for your corporation.
So this is a large-scale operation.
They think about this stuff very critically,
very focused on it.
And yeah, that didn't surprise me at all
that they sold stock on a Monday morning,
bought Bitcoin on Monday morning
when the price was at $78,000
and then proceeded to fall off a cliff.
Yeah, the way that I look at that,
and since we're going to be in Vegas,
might as well just look at this
from a gambling perspective,
right? So EV is your expected value. There's always a correct play to make. And the point is
to try to either make more or lose less when you make that play. And so if someone offered you the
chance, you had to bet that Bitcoin would be more expensive tomorrow or less expensive tomorrow.
And you had to make that bet every single day for the rest of your life. You would have to take
the bet that it was going to be more expensive tomorrow to get positive ev so the idea of like
holding back some cash for a dip just doesn't make sense from a from a pure you know expected value
view and if you got a long-term price target on bitcoin if it's 500 000 over the next 10 years
that if it's at 78,000 or 65,000, it doesn't really matter.
Right? Like you're taking a long-term perspective. Like this is a 40 CAGR asset for the next 10
years. I want to be long this asset whenever I have the money to buy it. It's the universal
target, right? Like a M&A target. Somebody asked if they buy OTC. I think there's opportunities to
buy OTC, but they don't have to. And I would suspect they have trading partners. Look,
we're going to have three trading partners at the True North event in Vegas. If you want to talk to
the trading partners about how trading works, we are literally going to have them in the room.
We're not going to record this. You go ask them the questions that you want to ask them.
You could ask them how they do the trading. You can ask them how that goes to custody.
Like, I can't promise you that it's exactly what strategy does, but like, you're going to get
perspective on how like hundreds of millions of dollars of Bitcoin is purchased. And I think
that's really interesting because this market is like totally not retail anymore. Like retail
doesn't move this market anymore. Institutions move this market, how institutions are buying it,
a buying spot, how institutions are hedging in different derivatives. Um, yeah, it's, it's just
so much more complex than I think a lot of people really understand. And, uh, they don't, they don't
need to go OTC to go clear a $90 million order. And it's like OTC isn't always available. Like
sometimes, sometimes it works, sometimes not. Yeah. You know, I just want to be respectful.
you got to drop off. But look, I don't know why there are some Bitcoiners that are hoping for
either Michael Saylor or Strategy's failure when they're buying $23 billion worth of Bitcoin.
It's the biggest buyer of it. So I don't see why they're self-destroying. Oh, it's centralized.
You know what? The Gini coefficient for Bitcoin is highly centralized already with the big
shareholders. So that's always been the case. So the takeaway is if it's good for a person,
it's good for a company, and then it's good for a sovereign nation. And I don't know why they're
like, oh, this is antithetical to what Bitcoin is. I'm like, no, it's a store of value. And now
it has switched from a store of value to being collateral for digital credit. And if you don't
believe in that, then you're not updating your beliefs. That's the whole thing. You're just
arguing for the sake of arguing. Totally. Okay. So one thing that's interesting,
this is Coinbase's balance sheet. And I brought this up because the valuation for MSTR and Coinbase
are very similar, right? As of right now, MSTR has got 714,000 Bitcoin. Coinbase has 14,000
Bitcoin. So MSTR literally has 700,000 Bitcoin more than Coinbase and their market cap valuations
are nearly identical. So I looked at the balance sheet just for curiosity.
And Coinbase has $31 billion in assets and $15 billion in liabilities. And it was interesting
when I was looking at the balance sheet here, the customer custodial funds is sitting on the
asset side of the balance sheet, at least some of their custodial funds. And so that was interesting
to me. And I think, I mean, strategies obviously got what, like $55 billion of Bitcoin.
Yeah, Jeff, let's do the simple math here.
If you've got $31 billion in assets and $15 billion in liabilities, that means you're 50% freaking leveraged.
Yeah, exactly.
Or to say it this way, they have five times the leverage, right?
Because strategy is 10%.
So they have five times the leverage of strategy.
Yeah.
And they're like, oh, and strategy has a 700,000 Bitcoins.
So basically 700,000 Bitcoins in these two comparisons, the 700,000 Bitcoins are being
valued at zero.
Zero.
Yeah.
And like of the assets on Coinbase's balance sheet, 5.4 billion are intangible goodwill.
Can you explain, Jeff, what goodwill means?
Goodwill is like a fugazi.
It's like you...
You know, I'll tell you what goodwill is.
Goodwill is like a trademark like the Nike swoosh or the Ferrari logo I would tell you that the fact that Coinbase thinks that they have billion in goodwill I think that that kind of wishful thinking in my view So it the excess
I think if I remember correctly from my accounting days, my conversations with our internal accounting
team, it's like the excess premium that you paid for a company that you've acquired.
So it's like the valuation, it's like the excess valuation of a-
Think about what you just said, if that's true.
Oh, it's crazy.
It's like I overpaid for a company.
I then count that as you carry it as an asset on your balance sheet.
It's insane.
Overpaid.
Oh, I guess that's true because you overpaid because you thought it was good.
So therefore, it's a good thing that you overpaid.
They overpaid for that damn Super Bowl commercial, too.
It was terrible.
Yeah.
And and Goodwill is one of these things that like it kind of gets audited.
but it's this place where accountants can kind of like, you know, move stuff around a little bit.
Like you're supposed to kind of draw it down over time. But it's just this moving figure
that's always a bit strange. Anyway, that's not the reason I brought it up. The reason I brought
it up is because they have customer custodial funds on their asset side. And I don't know how
much strategy has with Coinbase, but I think it's like, I don't know, it's probably a decent amount.
and they have 5 billion sitting as a technical asset on their balance sheet. I would assume
that's like Bitcoin in custody. That's not truly in like self custody. It's not like held in self
custody or something like that. I'm not a hundred percent sure. You know, what's crazy about this?
If you look at the liabilities from 2024 to 2025 in the bottom row, the two columns,
it went up by $3 billion in additional liabilities on strategies balance sheet.
It went from zero in cash to $2.25 billion in cash.
And so these went in opposite directions.
They acquired an additional $3 billion in liabilities and strategy raised $2.25 billion
in cash in one month of December.
And so, like you said, the market has mispriced this.
And you look at this and you're like, people are like, yeah, I don't get what you guys
are saying.
I'm like, I don't know how I can make this any simpler.
And I don't bring this up to shit on Coinbase.
I think Coinbase is a good company.
I think they are acting in best interest of the people that hold assets at their company.
I think they have a good solution for custody.
And I think they're good trading partners.
They've got good options or ability to lend off of it and do other things.
But this is a good example.
This is like comparing AWS of Amazon versus Google.
I'm not talking about the Amazon delivery side of it.
But if you wanted to compare something that's in the same industry, I will tell you that
Coinbase is basically in the same industry as strategy.
And therefore, I think it is a fair comparison.
Yeah.
And they're valued about the same right now, which is just insane, right?
Who has a better product right now, like Stretch or Coinbase Custody?
Think about the moat, right?
Like capital 700,000 Bitcoin is like absolutely fucking enormous mode.
Like custody is not an absolutely fucking enormous mode.
And it's disrupted.
And it can be disrupted.
Yeah.
And think about custody.
It pays an incredible low sub 1% or BIPs, right?
These fees are like just, you know, like they're going to go lower and lower and lower and lower.
right yep did we just lose jeff i think that was uh unceremonious departure
so are we still going guys or what's what's the story what do you want to do
sorry jeff is back yeah sorry guys my internet cut out but yeah i gotta jump uh thank you
everybody for thank you everybody for joining my final thoughts are i'm i mean price action sucks
but I'm incredibly bullish here.
I like these price targets.
I think risk is mispriced.
People don't understand what the risk profile
of these instruments are
and I look forward to talking about it.
So yeah, come to True North World.
It's Monday, February 23rd if you can make it
and yeah, look forward to meeting everybody there
that can be there
and let's chat all this stuff.
But I'll kick it over to you guys.
Feel free to keep running.
Mike, you got your model
that you can walk through.
But if not...
Yeah, I'll walk through the model right now.
If you guys want to stay on for this,
we'll just do it since we have a lot of people here.
I'll take people through it.
Catch you all later.
See you.
See you, Jeff.
Okay, let's see if this works.
You guys want to cover something real quick
before I go through the model?
No, let's see the model
and then we'll respond.
Yeah, okay.
So let me show you this.
So I'll give the quick backdrop.
So at Strategy World,
at the True North event that we're having, the inside event.
I'm going to be a host with a couple of people on stage.
I already know who they are, but we're not saying who they are publicly.
And so the question is, as the host, how do you value a Bitcoin treasury common stock?
That was the idea.
And I was like, well, I got to put something.
I have to figure out how I would value it.
And then I will talk to these other people in advance.
It's my goal to have a discussion with them beforehand and say, how do you guys value this?
So we have that.
So I wanted to come up with something that I can figure out how to evaluate.
So with that said, let me jump to what I did.
Share window.
Okay.
Let me know if this is big enough when it comes through.
Let's see.
I will zoom in here.
So let me view, zoom, 150%.
Is that big enough or I need to zoom in some more?
Yeah, do it again.
Okay.
that's the biggest thing okay so let me tell you why i did this i based this on a slide that was
in their deck so i will scroll down over here this is the slide that's in the deck and because
i have it zoomed in it's hard for me to scroll around so this this is important this is what i
reverse engineered so strategy says on the top of this slide medium they had a low medium and high
And what they said was double the Bitcoin per share in seven years, right?
And I was looking at this and I thought seven years is an odd number.
And then I saw the annual BTC yield is 10%.
And then it hit me because Saylor, I've already talked about this.
He says this all the time.
This is rule of 72.
So they just rounded down from 7.2 years to seven years.
So 7.2 times 10% equals 72.
That's the rule of 72.
that's the double metric. And so they're showing the Bitcoin per share in sats doubles. That's
their numbers. That's not mine. Now, the other tidbit that they put in here is they also say the
MNAB will have the 1.75x. Now, if somebody says to me, you don't know if it's going to, I'm like,
you know, I don't know that. But in an SEC regulated deck, strategy put this out there and
they said 1.75x. Not me. They said it. So I'm like, okay, given this information, let me start
calculating this. So what I did was I did the historicals. How does it work historically?
So starting in September of 2020, they had 38,300 Bitcoin. Let me do, hold on one second.
MSTR share price was $15. That was split adjusted. And the share is outstanding.
they only reported it yearly in the old days.
So I just want to be clear.
The reason why I don't have it quarterly in these over here,
why they're in yellow, is that was at the end of the year,
they then reported the number of shares outstanding.
So the old data is not as good as you'd like it to be.
So there's a little bit of, there's no inference.
So here's the date.
So your Bitcoin per share was 0.00074.
Well, if you get to today, you're at 0.0021.
Now, because I'm super fast in math, I know that 7 times 3 is 21, right?
So basically, your Bitcoin per share tripled over this time frame in five years.
They got to triple.
Like, okay, now they're saying it's only going to double.
This is in five years.
They're saying it's going to double in seven years.
So I looked at that and so here's the, I came up with my own metric, which is this over here on the right. Here's your quarter over quarter growth rate and here's your BTC year over year growth rate, which is about 62%. And this is on a quarterly basis. The numbers are all correct, but mathematically, if you have more data points, the numbers look a little smaller. It's just the way it looks.
And then I did this BTC per share value multiple since 2020.
So this is the part that people don't get.
They say this all the time.
They're diluting the shares.
They're diluting the shareholders.
But the value, it went up.
If you look over here, the BTC per share times the BTC price was equal to about $21.
And it went to 256 bucks.
And that's because there's more Bitcoin per share.
It did a triple.
But when you look at it on a dollar basis, it did a 12X.
so this is my own metric that i made up and put it in there so with that said how did i then
calculate how do i get a price so now we go down here to my projections and i have low
medium and high in the low projection i said that the btc kegger which means your btc held
somebody asked me dude how'd you get a bitcoin price of 672 500 no that's the number of bitcoin
held on December 31st of 2025.
They had 672,500 Bitcoins.
And I'm saying that grows at 20% a year.
Okay?
Now, what I did independently is I said
the shares outstanding grows at 8%.
The sweet spot is about 12%.
But if I was to make this over here,
if I was to make this 10%,
it recalculates.
that is equal to, oh my God, remember this slide over here?
They're saying the annual BTC yield is 10%.
And so what I wanted to, the reason why I didn't do this
is just Bitcoin per share at 10%
was because I want people to realize
that it's fricking accretive.
And they're like, well, how is it accretive?
It can only be accretive if you're getting 20% per year
in Bitcoin held and your share count
is only going up by 10%, right?
So the difference there is that 10% BTC yield.
And people are like, it's not accretive.
They're just diluting the shareholders.
No, because on a percentage basis,
and this is why if you look at the BTC share calculations
over this over seven years, it's 0.00216.
And it goes here.
It does not make the full double.
It doesn't.
And that's the reason why I changed this to 8% is because these are both being calculated independently.
So when I change it to 8%, right, which is about 12% because they're two independent variables,
your BTC per share calculation finally doubles.
And I can change this to 9%.
So I made this particularly, you can see right there, when the difference is 11%,
your BTC per share doubles. And that's why I made this with two separate calculators to get to that
number. And then I basically calculated the share price over here in this column. So I'll take any
questions from right there. Did I make sense the way I'm doing this? It's really the most rudimentary.
Now, if somebody says to me, did you take into account the cash, the converts, the prefs,
the yield payments? No. No, because I'd have to make all these crazy assumptions,
or I'd have to get everybody to convince that these assumptions would work,
and I just couldn't do it. Dan, you have much more complex analysis than I have.
But what I then did, somebody said to me is, you didn't use MNAV. And I'm like, okay, I'll do MNAV.
here's the mnav calculation and what i did on the mnav calculation um let me zoom over
so now you can see the mnav here and so here's the price again this is at 20 and 8 percent
you you double your bitcoin per share in this case the mnav is 0.75 and the share count is 783
Now, what's also important to note is that I said Bitcoin's only going up 10% a year.
So in 2032, the price of Bitcoin is only $231,000.
Because if Bitcoin goes up higher and everything else stays the same, then the price of the stock goes up more.
And, oh my God, I don't know if you guys remember, there was this slide that strategy said,
and they said their MNAV guidance was 1.75.
I didn't say it.
They said it.
So what I did was is, well, this is the 1.0 MNAV over here.
And then if I go scroll all the way down here and I'll go across,
here's the 1.75 MNAV.
So the Bitcoin per share, it almost doubles in this calculation.
I did 36 and 24%.
The price of Bitcoin is going up 20%.
And this almost doubled and the share price is $3,068 a share at a 1.75 MNAP.
And you're like, that's too aggressive.
I'm like, okay, but I'm saying Bitcoin only gets to $428,000.
I'm not saying Bitcoin even gets to a million at a 20% growth.
So you guys tell me which one you want me to change and I'll change the numbers and we'll
come up with a good number.
Yeah, that bull case almost kind of looks as far as Bitcoin's category.
That almost looks like the base case.
I'd pump that to 30.
So if a pump, okay, you want to pump this to 30.
Okay.
We pump this.
Now this is linear CAGR.
I pump it to 30.
It goes to, Bitcoin goes to 746,000.
I didn't change the 1.75 multiple.
The price of the stock goes to 5,300.
It almost doubles.
You know, and I could go over here in this scenario.
We could do them all at 30, do this one at 30%.
The stock goes to 3,000 at a one, this is at a one MNAV, right?
On the 30% number, right?
This is at a, you know, a one MNAV.
Bitcoin hits 746.
I think that the 30% is kind of high.
I would make that, Dan, what do you think is a good number on the CAGR?
I think 20% is more realistic.
On BTC?
Yeah. What do you model BTC CAGR for the next five to seven years?
I do 30.
You do 30? Oh, wow. You guys are... Okay. Go back to... Okay. 30%. At a 1MNAB,
the stock goes to 3,000 bucks a share in 2032. And the BTC share calc is pretty much exactly
double. And they've got 4 million Bitcoin?
They got 4 million Bitcoin.
You see, what happens is in this scenario at the top at a 20%, they only end up with 2 million.
And if I change this to 30%, they only end up at 2.5 million Bitcoin.
Bitcoin is at the same 746.
The MNAV, I will change the MNAV to 1.0 for all the bears.
And there it is.
The stock price is $3,300 a share.
it's the the btc basically is a little bit more than a double right i can make this nine percent
right here it's a there it's a perfect double it's at 3 100 bucks a share bitcoin's not even a million
i mean this makes sense right now i don't take again i'm not taking into account the reason why
i don't want to take the prefs into account because they have two and a quarter billion
dollars in cash which means they can pay the yield for two and a half years. So I figured
why model that? Because they already have the cash to pay the yield.
Yeah. Okay. That's the whole analysis. Oh, the other thing I did, this chart might be
interesting. Bitcoin CAGR. This chart is interesting. I want to just do real quick and then we zoom.
This I find interesting. People keep on saying, when does Bitcoin hit a million? And so I did the different CAGR amounts starting at 100,000. And if you look, the biggest drop, the biggest change is from 10% to 20%. But when you go from 20% to 30%, it hacks off a few years, but then diminishing return sets in.
So I don't think we have 40% CAGR, but the difference between 30, this is like the sweet spot is about 30% CAGR.
That gets us to a million in about nine years.
And this is just plain simple math.
Yeah, I agree with that sort of timeline.
Yeah, and I'll wrap up with this part.
The reason why I do multiple columns is to force people to make a constrained decision.
oh, do you think the CAGR is going to be 20, 30, 40%? They're like, well, I don't know, maybe 30.
I'm like, okay. Well, now that you see the difference, like 30 is kind of like the sweet
spot, not too high, not too low. It's probably not going to be 50 and 10% doesn't justify the risk.
So it's probably going to be somewhere between 20 and 30, right? And that tends to be, well,
we're going to get to a million in less than 10 years, you know, somewhere about there.
So that's why I show multiple columns to force people into making a decision, an informed decision.
That's why I do it this way.
But anyway, that was my whole thing.
I like it, Grant.
Yeah.
And so.
I'm wiped.
I'm probably going to sign off.
Should we do final thoughts here?
Final thoughts.
Go ahead.
I think we need to weather the storm.
I think there's a lot of irrationality at market lows, and there was a lot of irrationality at market highs, myself included.
Keep the middle path. Stay along the middle road. Don't get too crazy in the direction.
Salai?
Yeah, for me. I mean, if Bitcoin's going up forever, Laura, then every day is the best time to buy.
And if not today, then tomorrow's the best time to buy.
Yeah. And I will reveal a conversation before we went live. Look, if the price of Bitcoin and
strategy is way higher, then we'll be drinking to celebrate in Las Vegas. If the price is lower,
then like I said, we'll just hang out and have a good time with friends and commiserate. But
I think the numbers, it's NGU, the numbers going up. So thank you everybody for joining.
Amazing.
Yep. Thanks, everybody. Thanks, guys.
Bye.