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whoo we are back episode 31 true north the investment grade podcast and uh if you

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weren't aware we got no jeff today so i am the captain now and uh actually i drew the short straw

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and maybe we should air a little dirty laundry but tim said hey uh soleil and i can can co-host

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the podcast and then he jumped on a plane and just left me holding the bag so regular uh bravo

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foxtrot that guy but we love you Tim next time so I'm gonna share my screen

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we're gonna do the same old same old try to do Jeffy proud for anybody who is

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watching us for the first time we got grain Mason Dan and Adrian and

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Soleil. And let's just jump into the leverage tab. And as you can see, their leverage has been

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trending down. With the current price of Bitcoin at 107-ish today, they're only at a 13.2%

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percent leverage ratio so there's plenty of room for them to add and one of the things that i've

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been saying lately is that i suspected they were going to you know maybe wait for bitcoin to make

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some kind of move and then ivy would spike a little bit they could get good um

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good uh convertible bond deals going and then this iv would kind of spike as the leverage ratio

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increased. But with the preferreds ramping up, it kind of makes me wonder if the preferreds are all

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we need from here going out. And even at like, you know, like 2000 Bitcoin a week, and then maybe

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if that ramped up to like 4000 a week as the preferred start to mature, that would still be

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about 3,000 Bitcoin a week for the next 26 weeks, which would be another 78,000 Bitcoin,

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which would put us at 670,000 Bitcoin, which is real darn close to some of the predictions that

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we made. I can't remember what everybody's predictions were, but that's kind of like

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right around where some of our guesses were landing.

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So what do you guys think?

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Are we just going with preferreds from now on,

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or are we going to see some of these convertible bond deals

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that we're used to seeing just hitting left and right?

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Yes, Oleg.

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I'm echoing. Sorry.

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Do you want to come back to you?

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Yeah, let's stop sharing the screen and then I'll hop in.

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Yeah, so Saleh, when Dan talks, put your microphone on mute and maybe that'll stop the echo when he's talking.

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Will do.

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I think in regards to the converts versus the preferred, so there's a couple of really important things I think that I have overlooked and some of us have overlooked in terms of the risk associated with the convert.

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Well, one, the convertible note holders obviously are predatory towards the stock considering

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that they're mostly Delta hedgers, right?

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And I've overlooked that.

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I think a lot of us have overlooked that.

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Oh, it's okay.

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It's cell pressure, right?

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If they, these, when these instruments come out, they're pretty much a 50 Delta instrument,

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meaning if strategy moves 3% in a day, they'll move 1.5% that day.

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These convertible notes, essentially they have 50% price exposure to the underlying MSTR.

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And that changes as the price of MSTR goes below and above the strike of those convertible

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notes.

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That's what delta is, its sensitivity to the price and the underlying.

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But what they do, the convertible are, and we'll have a little section on this later,

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what they do is they short the equivalent exposure to MSTR.

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So they're net neutral.

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So when these converts come out, they go and they short the stock and it's very predatory

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and provides cell pressure.

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Then as the price of MSTR fluctuates above and below the strike price of these convertible

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notes, they're both adding to their short as the price increases above the strike and they're

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buying back their short for a profit as the price of MSTR goes below the strike of these convertible

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notes. And that dampens the volatility. And obviously that's not great for shareholders

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who are looking for the volatility. Furthermore, with these converts, there's term risk, right?

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So the MSTR investor, or sorry, the strategy itself, the corporation, they take on term debt

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risk with these notes. And we've always said, oh, they're, you know, spaced, they're laddered out

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five years and more into the future. And based on Bitcoin cycles, it's very unlikely the notes

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don't convert X, Y, and Z. But if you're going out and trying to rate strategies, preferred

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instruments, strike, strife, stride, then having term debt sit senior to the preferreds in the

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capital stack is detrimental to the credit worthiness of those instruments. And for those

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reasons, I think strategy is quite frustrated that they give convert bond holders all of this

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priority, these extremely good terms, very cheap call options, essentially. And all they do is they

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smoke the pricing period by shorting the stock, short the equity, kill the vol, and they get the

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best terms in the entire capital stack. So I think strategy is quite frankly trying to move away from

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these and give the best terms to the strife holders and the strike holders who are in line with the

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common equity holders who are long the stock and they don't take on the term risk associated with

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the convertible notes. So I think that's kind of where they're headed. Dan, hypothetically,

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if there was a market appetite big enough to consume, you know, all the demand for these that

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were long only, would they consider that? And is that even, that would just have to be based off

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a relationship, basically a handshake, right? I think that's a really good point is like,

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So you're saying, what if there was some sort of buyer who wanted to be a long only shop and strategy would then issue the converts to them exclusively?

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I've talked to Josh about that a bit, and I think you have as well, Mason.

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And I mean, that's a super interesting prospect, but what sort of terms can you provide in the actual note?

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like i i think right wouldn't wouldn't uh convert are they're so good for convertible arbing wouldn't

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the convertible art shops just get in on that deal and strategy would have to throw their hands up

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and be like well i'm selling to these guys and they said they wouldn't convert arb and then they

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do convert arb like yeah i mean i guess i guess you're right i don't know yeah that pinky promise

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isn't gonna hold up yeah no their incentive is to short the stock um so they're i don't see how

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a long only convertible note structure could be enforced long term without without having to

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completely restructure the way these deals are done now I'm not saying it's impossible but what

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I'm what I'm saying is if it is done would the terms be as beneficial to strategy in terms of

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interest rate yeah great point yeah great point versus would the the potential note holder see it

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potentially less attractive because they don't have that hedging opportunity and this is kind of

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why when people have been kind of you know talking about the atm the atm atm have been like it's not

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the atm there are too many other factors that go into what what could be potentially suppressing

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volatility what could be potentially affecting the um equity price and now that we've had time

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to reflect on it we see the long-term net effect of the delta hedging that are going on with these

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these convertible notes and even though they are staggered out i think the next was what 2028 2029

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one of those two even though they're staggered out these holders are incentivized to to short the

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stock in perpetuity so the only thing that's going to break that is bitcoin really breaking out and

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sentiment really shifting in our favor broader market sentiment and equities and the sentiment

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because right now i think the sentiment around equity is relatively fine i don't think it's low

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but we're going to need to see some sort of pivot in the market to change the dynamics that are

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taking place right now with these converts and we're going to need to see that more long term

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before they would even consider another one i think yeah they can be super picky right now i

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think because they have the preferreds so they can kind of just grind up the um the leverage ratio if

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they want to and then if people are just banging on the doors like please let us give you money and

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and they can just get really great terms,

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maybe that's when they finally just do it.

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Because at the beginning, I think they had really bad terms.

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I think some of their first deals,

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I think their Bitcoin is even encumbered, right?

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So they just keep getting better and better terms over time.

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So they're really not desperate for any of these deals.

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So like-

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Oh, go ahead.

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No, go ahead, Adrian, go ahead.

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No, they're not desperate.

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But long-term, I think they're gonna have to consider

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some things that they're not wanting to consider. More active generation of yield on their Bitcoin

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holdings, perhaps, some other kinds of structures with regards to what it is they're doing in terms

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of these preferred offerings. They're going to have to diversify because something is going to

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need to justify that additional multiple that we all know is coming. But if they go through this

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process and they just issue converts, even with more favorable terms, is the leverage of the

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to the balance sheet going to be worth it in terms of the amount of bitcoin they hold and the amount

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of suppression the the amount of bitcoin they eventually hold and the amount of suppression

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they're going to see in terms of volatility it's going to have to be a balance so i think that

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they're going to have to do something that signals to the market a multiple a higher multiple is

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justified and also find a way to net to neutralize the effect of the neutralizing effect of the

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convertible box so um they're gonna have to think outside of the box and that's something that i

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think that they're probably working through now i don't know if this is a problem they need to solve

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in the next six months and i don't really even see it as a problem i just see it as a natural

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progression of the market if strategy is as i've been saying or as some of us have been saying an

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economy economy economies of scale have different factors involved and they have both combat they

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They both have adversarial actors and cooperative actors.

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Right now, what we're seeing is adversarial actors

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in one stance, but cooperative actors in another.

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And that kind of a seesaw effect

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is what's being equalized right now.

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So I do think this is gonna shift,

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but it's just a matter of how they're gonna do it.

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Yeah, that's a really, really good point, Adrian.

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And I think sailors alluded multiple times

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to different products in different markets,

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And that could be really, really interesting.

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We've seen in like the UK market, for example, with the different LBEs popping up there and getting so much traction.

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All these markets are starved for yield.

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We've seen it in Japan and South Korea.

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So I don't see why a product issued in another jurisdiction wouldn't really take off a Japanese stride.

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I think it really is a race between Metaplan and Strategy to issue those two products.

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And I think they can both win in that environment.

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They can.

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And the thing about it is, sorry, Mason, just one quick point.

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The thing about it is right now, a lot of these other plays, they're not LBEs yet.

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They're just treasury companies.

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They haven't taken on leverage.

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So I can see a future where instead of expanding into the market with additional offerings,

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what if strategy expands these markets through acquisition?

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A lot of these companies are relatively small.

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And if they don't or if they cannot like ramp up the leverage on their balance sheet and scale, they're going to be essentially what, flat?

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They're going to accumulate Bitcoin, yes.

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But what's going to justify the long term multiple that we're seeing, that they want to see, that they have been seeing, right?

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So what if strategy expands into the market in terms of acquisition and in terms of offerings in these other markets?

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i think that is something that not only broadens this economic model that we've been talking about

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but also it can justify a multiple if the strategy is now scaling out into different jurisdictions

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with different offerings yeah yeah that's a that's a super interesting idea because it's like a it's

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an injection of attention right like it's if you're if you're completely flat your m nav's flat i mean

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we're very much in an attention-based economy right and the the companies that have the biggest

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followings that have the most attention that have the most uh narrative and momentum behind them are

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going to be able to do the strategy the best and the ones that kind of fall flat on their face

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yeah it's a really interesting proposition that they could go in there and acquire them um before

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that Adrian I was just going to say I think sailor said in Prague that I think he kind of admitted

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that going into other markets like Japan is going to be you know very difficult and I think he kind

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of hinted at that Metaplanet is going to have a a potential lead there so I thought that was a

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telling that number one he's looking into it and number two it seems very difficult

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it is but japan is a known market so while meta planet i do think will eventually have a monopoly

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in japan and perhaps even the broader asian market as a result he can find other ways to do things

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it's just a matter of what they're willing to do and how they structure it we didn't we didn't see

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the impetus for the preferred offerings until struck some strike came out right then it was

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strike and i'm stride and now we're thinking okay well now he can do x y and z it makes sense for

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to do that i think once they figure out a way to do this the first time if it becomes something that

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they really want to consider which i think you know to your point the fact that he even mentioned

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that meant that they were thinking about it so they're going to find a way to do it eventually

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which market that's done in i can't i can't say but as you said we are an intention economy which

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i which i refer to as sentiment right this is all sentiment mnav is all about sentiment mnav is all

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about attention. So they're going to need to do something new outside of the box of what they've

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been doing in order to drive sentiment. And I want to be very, very specific here. They're not

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driving sentiment in terms of their directly impacting sentiment. What they're doing is

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they're creating an environment where sentiment can run. If they scale this out into other markets,

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and then the market starts to cooperate in terms of liquidity, in terms of sentiment,

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in terms of broader macroeconomic trends,

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then the thing can really run.

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I think people are putting cart before the horse

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in terms of their assessment of MNAV.

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MNAV is after the fact.

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It's not before the fact.

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So MNAV can only run

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if they create an environment for it to run.

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And for them to justify multiple longer term

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over the course of not just months and quarters,

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but years and decades,

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I think they're going to have to scale this thing out

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far larger than we're anticipating right now.

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And I do think that, you know,

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more more preferreds more offerings expanding into other markets acquisitions of some small company at some point um that you know that holds a big corner in their balance sheet maybe even pivoting back to

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the like i've been saying that they can do on the business intelligence side they find a way to

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scale that that's another way to justify a multiple they're really gonna have to start thinking about

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this thing holistically um outside of just what bitcoin derived moves can they make then you start

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thinking about what kind of a market move can they make what kind of a broader move can they make

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outside of just bitcoin because all of it is synergy and this is a synergistic opportunity

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that they have so if they can do that which i think they can things are going to shift rather

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drastically but as we've been saying to people for a year now all of us individually if not longer

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this is a longer term hold this is a longer term play so where it is in five years versus

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where it was five years ago i think it's going to be drastically different

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yeah so lay might if we pop up this uh screen share here absolutely go for it um it should be

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in the background i should i requested to share oh so now i have to figure out how to allow you to

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share that's super um it should it should be somewhere where like the backstage is

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but in the meantime uh what do you guys think about here we go

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so all i i wanted to go through the the three things and just in summary and i think this idea

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mason and i've been talking about a bit too and i think it's exactly what adrian was saying

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is this idea that atm like why is atm why is there a demand for equity right first and foremost

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What we've seen in the UK markets, in the Japanese markets, and in the US market prior to ETFs and then still during ETFs, there's been jurisdictional demand for exposure to Bitcoin.

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Plus, there's kind of the sentiment demand for BTC yield and growth expectations on the equity.

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So that's kind of why ATM, like for ATM to continue working for any sort of LBE or Bitcoin treasury company, there has to be demand for that equity.

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And maybe that's also a couple of points I forgot to mention where the options markets, the liquidity,

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all of these things are inputs into demand for an equity. Then obviously you have the converts,

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which give holders, these large institutions, essentially a free call option on the common

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equity plus priority term claim over the Bitcoin, which introduces, as I said, exponentially more

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risk for strategy. And then the prefs, right? And the prefs, I think are the real unlock.

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and i totally see what adrian's saying about expanding into different markets in this and

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the next thing but then someone in the comments also said sailor needs to drain the bond market

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i really do believe the press are the pump between the bond market and the bitcoin equals ecosystem

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and i just really don't think people um obviously there's very little trading volume for strife and

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strike and strata right now but i think that will continue to increase it really should as long as

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like markets move slowly and people take a time to change their minds but i think that will come

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you guys want to hop in there say anything i missed no it will and i agree the thing with it

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is is that he can drain the bond market and the share price will will expand and the overall um

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value of the company will expand but that doesn't necessarily mean that the multiple will expand

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so wouldn't that be reflected in btc yield like all pref issuance is comes back down to the bottom

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amount of ptc yield it can and that does yeah yeah yeah no that that does make sense but

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what kind of a multiple right now yeah you know the if we're talking about 1.5 or 2

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that's more akin to a bank right or or something like that or not perhaps perhaps more like a reit

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right what we want is a multiple of three four five eventually at some point right so i think that

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the the bond market he can siphon away capital from the bond market but there's two things with

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that you're absolutely right but there's two things with it one that will take a longer time

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so we're going to see the multiple perhaps be i don't want to say trapped but stuck between 1.5

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to 2 maybe as he does that process because it's not as if he's going to get the bond market

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overnight right there's gonna be something that's a very very long process and two because of that

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longer term um process over the course of the next five ten fifteen years or or whatever we're going

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to see a multiple increase yes but we're not going to see but but what i'm what i'm trying to get at

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is if he's targeting that 2x out performance i think that's perfect if we want a larger multiple

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i think they're going to have to diversify their approach totally agree so i think we're both right

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But, you know, sorry, go ahead.

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I totally agree.

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I just, I concur.

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I totally agree.

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And then...

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No, UX is fine.

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That's not a bad thing.

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2X of Bitcoin for the next decades.

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I mean, that's a win.

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Well, you know what people are looking for, right?

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They want to see, well, can we get the three, the four, the five?

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I agree.

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Yeah.

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Yeah.

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Is the leverage ratio affecting like the amplitude of the moves?

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Like, let's just say 3MNAV is our baseline.

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and then at a low ratio, maybe we fluctuate between 2.5 and 3.5.

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But once we're levered up to like 20, 25%,

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does that kind of like increase the peaks and troughs to like 2 to 5 or something?

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Or is it maybe not connected in that way?

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I think the swings have been more violent to the upside

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when they've had higher leverage ratios for whatever reason.

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But that could also be because of a smaller market cap.

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So it's tough to do like a really, really kind of isolated experiment on historical data.

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You know?

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Yeah.

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And it seems like the run of November.

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Go ahead, Adrian.

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Go ahead.

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I was going to say, the other thing with that is that people are perhaps underestimating

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is exactly what Dan just mentioned, the market cap.

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It's going to take a lot more to move the price now that the market cap is over 100 billion.

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So we have a lot of factors right now.

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that a lot of a complex of a lot of factors right now that are impacting price which is why um you

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know the moves that we've seen we haven't seen a rip to 500 or 600 yet it's because the market cap

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is much larger now and there's far more players in the market because of the preferreds in addition

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to what we just discussed with regards to the r trading and then we have the options market of

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course we have all the leverage plays and whatnot and then we have the underlying bitcoin price

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action there's a lot there are a lot of factors going into play right now that are playing into

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where the stock price is but we still should be cognizant of the fact that stock like stock split

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adjusted before that we are over thirty four hundred dollars a share when we're when we're

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over two thousand dollars a share people losing their mind last year in the best way possible

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right so it's not as if this this um approach this strategy isn't working it is it's just that

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it's going to need to ebb and fall and adjust to the market definitely i have this quick um

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illustration of delta hedging because it does take it it's easy to think you understand how

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what it means and where the money's made but it took me a really little bit to understand where

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the money's actually made i just want to illustrate the point that the money's made on the way down

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so this you can see the msdr price at 380 let's say they issue a convert at a 50 premium or 30

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premium it's effectively a 50 delta instrument meaning these convertible note hedgers they

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borrow money they buy the convertible note from strategy they short half the value of the

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convertible note in common equity that's in blue if the price of mstr then goes down right down to

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300 the delta or the sensitivity of the instrument to the price of mstr goes down right that's kind of

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options theory and what that means is now to be delta neutral or not exposed to the price

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they buy back some of their shorts and when they buy back these shorts these shorts are then bought

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at a profit because the price is now down so they shorted up here but they weren't exposed to the

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price they bought back their short here made a small profit and they're still not exposed to the

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price of mstr but then as the price of mstr runs back up past the all-time high or wherever they

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They then short the stock more to remain delta neutral and then run the playbook again, up and down, up and down, making money on the increments down.

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So that's the way it works.

302
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It's kind of interesting the way they do that.

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There's a seesaw effect is what they're playing right now.

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Exactly.

305
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Exactly.

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It's right.

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As the price goes up, more shorting.

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As the price goes down, less shorting.

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What's that do?

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It dampens volatility.

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And they make money both ways.

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They make money.

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Exactly.

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Then I think to Adrian's point, what we're all kind of talking about, I know Mason has something to say here, is the capital structure.

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So how much room is there really for strike and strife?

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And obviously, these are pictures you've all seen before from the different offerings.

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But look how much room they really have.

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This is their current capital stack.

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Let me zoom in on that.

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This here is their current capital stack.

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And that's something to remember how much runway there is for these converts if there is demand.

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Hop in guys, if you have anything on that.

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No, keep going.

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Okay.

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And then I have this one we'll save for later.

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I know Mason likes that one.

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But what I wanted to really illustrate here is something that I think we touched on a

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bit, but it's the convertible securities secured versus unsecured debt.

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And this is super key because we're trying to analyze all these Bitcoin treasury companies, whether it be new entrance to the market, strategy, metaplan, whatever it be.

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Most, almost all are unsecured debt.

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So there's no specific pledged collateral for these convertible notes.

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What they take as collateral, per se, is the creditworthiness of the company.

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So in the case of strategy, those convertible notes sit senior in the capital stack and the collateral that has been pledged to them are upon the repayment date or the term date is that strategy will continue to have assets and will be obliged to pay the principal back upon maturity of those bonds.

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Now, this is a little bit of just a historical fact, but secured debt, on the other hand,

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has tends to have a higher recovery rate than unsecured debt in the case of default.

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But, you know, we don't think that's very likely with any of these companies.

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The point, though, the real key difference between a Bitcoin treasury company that has

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unsecured debt and one that has secured debt is the margin call and the liquidation risk.

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So you remember back in the bear market when everyone was saying strategy is going to get

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liquidated. This is the next thing they're going to get margin called. We all knew

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No, this is senior unsecured debt.

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So the company would have to be, upon maturity, strategy will owe the debt if it doesn't convert

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the principal to the bondholders.

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With secured debt, there is collateral.

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And so the case of NACA, they have a 2x, and I don't know the exact provisions, but generally

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they have a 2x collateral requirement on the secure, the senior secured convertible notes.

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So if the collateral, the collateral being the Bitcoin, let's say Bitcoin draws down 80% tomorrow, they would be margin called on that debt.

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And they would be either required to pledge more collateral to meet this 2x backing of the secured note, or they'd have to return principal to the actual bondholders.

349
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Right. And so this means there is liquidation risk with secured debt, whereas with unsecured, there's not.

350
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that's something that's going to be really really really important looking at these new companies

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because secure debt will give the bondholders uh the bondholders will give whatever companies

352
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offering secure debt better terms whereas with the unsecured debt the company will be at the company

353
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will get um less favorable terms um but again they don't face this liquidation risk

354
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and that's why the atm is so powerful he's buying the bitcoin outright exactly so um then and again

355
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i'm not trying to get people grumpy in the chat or that are watching this but when people complain

356
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about the atm and that it's suppressing the price as we've just discussed one there are far more

357
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factors that are that are impacting price right and two the atm is this is the biggest weapon in

358
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their arsenal buying the bitcoin outright and making and making sure that it's not at risk

359
00:29:17,970 --> 00:29:23,650
allows them to survive the bear market so when we do see another drawdown whether it's 20 whether

360
00:29:23,650 --> 00:29:30,290
it's 80% strategy is far better positioned to survive it. Whether it's NACA, whether some of

361
00:29:30,290 --> 00:29:36,190
these other companies that are doing, that have that collateral risk, a bear market gets a little

362
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bit more prickly for them. Because if we do see a prolonged drawdown, they can have a variety of

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situations which can put that Bitcoin at risk. So these are all things that are people, to your

364
00:29:46,370 --> 00:29:53,510
point, are going to have to work through and flesh out in terms of investment decisions that

365
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they make. And it's going to be a learning opportunity for us

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collectively seeing how these different instruments last in a

367
00:30:00,170 --> 00:30:03,230
bear market. But strategy already survived one I mean, 2022

368
00:30:03,230 --> 00:30:08,190
is nuts. Everything blew up, right? It was the entire rehypothecation

369
00:30:08,190 --> 00:30:10,950
bubble. I don't think we're going to see that kind of a risk

370
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again. But if we do see a prolonged drawdown for any

371
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particular reason, this is why I mentioned the whole potential for

372
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strategy acquiring companies or for them expanding into market in

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different means i think there'll be opportunities there and if they can take advantage of them

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it may be ironically enough due to the weakness of other players in the market versus the weakness

375
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of their own strategy yeah i mean depending on how bubbly this this market gets in the next year or

376
00:30:40,290 --> 00:30:45,650
maybe two um there could be so many companies where we simply don't have the bandwidth to know

377
00:30:45,650 --> 00:30:52,610
to look at you know all the the capital structures and uh it could really come out of nowhere but

378
00:30:53,010 --> 00:30:58,830
it you know I hear a lot of people kind of raising these concerns about this I think

379
00:30:58,830 --> 00:31:09,150
it's top of mind amongst Bitcoiners and I think um I'm I I've been starting to think about you know

380
00:31:09,150 --> 00:31:14,910
what what can these new companies really get for size and then how many companies can get

381
00:31:15,810 --> 00:31:21,150
uh really large positions and you know if a company with 500 Bitcoin goes under

382
00:31:21,150 --> 00:31:29,710
that's that's not really going to do much right yeah so it it really has to be the uh

383
00:31:29,710 --> 00:31:34,990
the first comers and i think we're seeing this this cohort here i think you know strategy

384
00:31:34,990 --> 00:31:44,110
similar meta planet uh we now have anthony popliano um gamestop basically companies with

385
00:31:44,110 --> 00:31:50,870
thousands of coins those are the ones that really matter and so far i think most of them

386
00:31:50,870 --> 00:31:57,350
at least from the the little research i have done because there's just so many they look okay but

387
00:31:57,350 --> 00:32:04,710
then you know you you hear stuff like like dan brought up the uh the secure debt on naka and it

388
00:32:04,710 --> 00:32:10,230
you know to me it's like huh that's a little that's interesting um if i was an investor i would want

389
00:32:10,230 --> 00:32:15,910
to look into that more so here's the here's another thing that i've thought through i've been trying to

390
00:32:15,910 --> 00:32:22,630
you know, assess what happens if we do see Armageddon, right? Or some kind of prolonged

391
00:32:22,630 --> 00:32:28,390
drawdown where strategy is ideally positioned to survive while these other companies are not.

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00:32:29,270 --> 00:32:32,950
And to Mason, to your point about the large players with regards to having thousands of

393
00:32:32,950 --> 00:32:37,990
Bitcoin, right now, every single one of these small Bitcoin treasury companies could go under,

394
00:32:37,990 --> 00:32:41,830
and it's not even going to be a blip in the market in terms of Bitcoin selling, right? It's just not

395
00:32:41,830 --> 00:32:46,950
going to matter um so what if sailor is in a position in the future where he's playing warren

396
00:32:46,950 --> 00:32:52,870
buff and he's bailing these companies out for the good of the ecosystem so let's say that you have

397
00:32:52,870 --> 00:32:56,790
a company that's been a prolonged bear market strategy is relatively in a

398
00:32:58,630 --> 00:33:02,950
i don't want to say safe position but they are in a survivable position even though they have

399
00:33:02,950 --> 00:33:09,510
a long drawdown and you have a risk of a lot of companies starting to go under does sailor start

400
00:33:09,510 --> 00:33:13,990
looking at taking positions in those companies as you start looking at to facilitate some kind of a

401
00:33:15,110 --> 00:33:25,460
i don know injection of some kind i can just see this going so many different ways because the Bitcoin trade is cooperative It not adversarial It is in strategy benefit for these companies to

402
00:33:25,460 --> 00:33:30,460
succeed. Will, if we do have a prolonged drawdown where companies start to fail,

403
00:33:31,020 --> 00:33:38,960
would strategy somehow act as a buffer for that? Just because of the sheer scale of their operation.

404
00:33:39,460 --> 00:33:43,440
I'm not saying that because I think it's feasible or true. I'm just saying, is it possible? And what

405
00:33:43,440 --> 00:33:48,280
does that even look like? Because everyone keeps talking about Armageddon, but with regards to,

406
00:33:48,420 --> 00:33:51,880
oh, these companies are going to blow up, oh, it's going to be the next bubble, so on and so forth.

407
00:33:52,440 --> 00:33:58,300
I just don't see that happening. There's too many cooperative reasons for these companies to see

408
00:33:58,300 --> 00:34:03,520
each other succeed versus a mass contagion versus of some kind spreading and them starting to drop

409
00:34:03,520 --> 00:34:07,780
like flies. So that's one of the other scenarios that I've been kind of trying to game theory on

410
00:34:07,780 --> 00:34:12,780
my own mind and what that would even look like. Yeah, I think it would have to be a pretty juicy

411
00:34:12,780 --> 00:34:14,520
deal for them to do that.

412
00:34:15,500 --> 00:34:16,780
I think, I mean, if Bitcoin is

413
00:34:16,780 --> 00:34:18,180
imposing the free market on the world,

414
00:34:19,520 --> 00:34:20,840
I think that too big to fail

415
00:34:20,840 --> 00:34:22,800
kind of thing or the, I know it's cooperative,

416
00:34:23,860 --> 00:34:24,180
but

417
00:34:24,180 --> 00:34:26,540
by not

418
00:34:26,540 --> 00:34:29,080
allowing someone to fail

419
00:34:29,080 --> 00:34:30,740
when they deserve to fail, like if they over

420
00:34:30,740 --> 00:34:33,060
leverage, you're almost kind of like

421
00:34:33,060 --> 00:34:35,100
sending

422
00:34:35,100 --> 00:34:36,560
bad signals to the market

423
00:34:36,560 --> 00:34:38,920
that you can make

424
00:34:38,920 --> 00:34:40,520
mistakes and still survive. So I

425
00:34:40,520 --> 00:34:42,640
think we're going to

426
00:34:42,640 --> 00:34:44,500
we're going to see a lot less of the,

427
00:34:44,500 --> 00:34:48,220
the too big to fail kind of things where people are making bad business

428
00:34:48,220 --> 00:34:52,620
decisions and then still able to like zombie their way through life.

429
00:34:53,840 --> 00:34:55,420
Perhaps it's not too big to fail.

430
00:34:55,540 --> 00:34:57,040
Perhaps it's more of a,

431
00:34:58,920 --> 00:35:02,000
if you let letting them fail without risk to Bitcoin.

432
00:35:02,520 --> 00:35:06,700
So what I mean by that is if they do fail and if they are failing,

433
00:35:06,880 --> 00:35:07,840
what's failing in that,

434
00:35:07,940 --> 00:35:08,060
the,

435
00:35:08,180 --> 00:35:09,120
in that kind of a scenario,

436
00:35:09,360 --> 00:35:10,840
it's not Bitcoin that's failing.

437
00:35:10,940 --> 00:35:11,840
It's the equity that's failing.

438
00:35:12,640 --> 00:35:18,900
There is a way that the equity can be allowed to fail while the Bitcoin could be acquired in some form of structured deal, isn't there?

439
00:35:19,720 --> 00:35:21,760
Because this is me asking. This isn't me telling.

440
00:35:22,500 --> 00:35:27,260
If a company, if a treasury company is failing, the equity is failing itself.

441
00:35:27,360 --> 00:35:29,000
It's not the Bitcoin on the balance sheet that's failing.

442
00:35:29,000 --> 00:35:33,340
They're going to have a very simple debt to income or debt to asset ratio.

443
00:35:33,340 --> 00:35:40,700
So is there a scenario where those Bitcoin could be acquired in a direct fashion that

444
00:35:40,700 --> 00:35:46,060
does not facilitate selling in the open market while the company is still allowed to fail?

445
00:35:47,120 --> 00:35:47,280
Yeah.

446
00:35:47,380 --> 00:35:50,700
I mean, it's like those hostile takeovers they're doing in the 80s.

447
00:35:50,760 --> 00:35:53,800
And there's probably people in the audience that know this better than myself.

448
00:35:53,940 --> 00:35:57,060
But they used to go up, buy a controlling stake in the company, and then sell off the

449
00:35:57,060 --> 00:35:57,920
assets for a profit.

450
00:35:58,580 --> 00:35:58,660
Right?

451
00:35:58,880 --> 00:35:59,080
There you go.

452
00:35:59,080 --> 00:35:59,800
Especially this.

453
00:35:59,800 --> 00:36:04,200
it's you'd buy the company at a discount it'd have to be trading below probably 0.8 nav

454
00:36:04,200 --> 00:36:08,840
if it's trading below 0.8 nav you buy controlling interest in the company sell off the other assets

455
00:36:08,840 --> 00:36:13,480
keep the bitcoin you got the bitcoin for free um transaction fees hopefully hopefully were less

456
00:36:13,480 --> 00:36:18,120
than 20 of the total cost and you made and you bought bitcoin at a discount it's like buying ftx

457
00:36:18,120 --> 00:36:23,880
claims in the bottom of the bear right you get bitcoin for 10 cents on the dollar yeah and in

458
00:36:23,880 --> 00:36:29,000
this case um if you think of it you know how there's a hostile takeover model that is activist

459
00:36:29,000 --> 00:36:33,800
model right people take a large enough stake in a company to create to be able to facilitate change

460
00:36:33,800 --> 00:36:37,560
because they have that controlling interest right or large enough interest we can call this a bitcoin

461
00:36:37,560 --> 00:36:45,080
activist model sailor's going in to make sure that he protects the over the overall um price action

462
00:36:45,080 --> 00:36:50,200
of bitcoin because it's in his advantage it is it is in his interest to do so but the equity is then

463
00:36:50,200 --> 00:36:55,000
allowed to fail so you can think of it as a bitcoin activist model or hostile takeover model

464
00:36:55,000 --> 00:36:59,660
a little hard if you want to phrase it, but I just think that because to Nitu's point,

465
00:37:00,440 --> 00:37:05,660
it is cooperative. We do not want a too big to fail kind of a dynamic playing up,

466
00:37:06,140 --> 00:37:12,040
but we do not also, we also don't want a situation where these companies are just dumping Bitcoin

467
00:37:12,040 --> 00:37:16,260
in the market and then the market overreacts because proportionally it's a small amount of

468
00:37:16,260 --> 00:37:19,320
Bitcoin, but you know what the market's going to do, right? Market makers are going to find a way

469
00:37:19,320 --> 00:37:27,720
to fund this and make it a larger issue than it is so i think kind of in a way strategy can act as

470
00:37:27,720 --> 00:37:33,720
somewhat of a circuit breaker for all these things if that happens i mean it's in their best interest

471
00:37:35,160 --> 00:37:40,040
dan remember when we got strategy world and i stopped in the hallway and i was like strategy

472
00:37:40,040 --> 00:37:47,720
is going to buy some of these companies i was like because i just felt this wave of of of momentum

473
00:37:47,720 --> 00:37:54,520
happening with with these companies and this was in you know may and it's in their best entry like

474
00:37:54,520 --> 00:38:01,800
if the scenario arises and if it's feasible if the discount if the bitcoin's trading at a discount

475
00:38:01,800 --> 00:38:09,080
like or the company is trading at a discount to their bitcoin like strategy was in in 2022 2023

476
00:38:09,720 --> 00:38:17,160
it makes sense to to do an acquisition and get the bitcoin below market price it's a no-brainer

477
00:38:17,720 --> 00:38:22,640
Yeah, and OBC Dave in the comments here is making a really good point too, though.

478
00:38:22,640 --> 00:38:24,940
It's making me rethink this whole conversation.

479
00:38:24,940 --> 00:38:28,960
But he's saying leverage buyouts tend to work better with illiquid assets like facilities,

480
00:38:28,960 --> 00:38:30,180
equipment and such.

481
00:38:30,180 --> 00:38:34,960
Whereas, you know, any sort of company that's in distress could in theory sell their Bitcoin

482
00:38:34,960 --> 00:38:39,100
on the open market and wind up operations.

483
00:38:39,100 --> 00:38:40,520
And so that's a good point too.

484
00:38:40,520 --> 00:38:41,460
I guess we'll see.

485
00:38:41,460 --> 00:38:44,540
Maybe there's, you know, certain corporate structures that make it such that that's difficult

486
00:38:44,540 --> 00:38:47,800
So the shareholders want to be bought out and that'd be easier than liquidating on the Bitcoin.

487
00:38:47,980 --> 00:38:50,860
Maybe there's a significant capital gain on the Bitcoin.

488
00:38:51,000 --> 00:38:53,160
They don't want to realize that gain by selling to the open market.

489
00:38:53,300 --> 00:38:55,960
So I'm not sure, but it's definitely one thing that could be done.

490
00:38:56,060 --> 00:38:57,180
So it's interesting.

491
00:38:59,120 --> 00:38:59,560
Yeah.

492
00:38:59,680 --> 00:39:13,380
And so if it takes, what, 10,000 hours, 10,000 hours to really grok Bitcoin, and then maybe it takes another, I mean, just our group alone probably has tens of thousands of hours of study on a strategy itself.

493
00:39:14,040 --> 00:39:27,580
So if there's going to be hundreds and hundreds of these Bitcoin companies, there's no way that our group or even the entire thousands of people watching this show can like study and understand them all.

494
00:39:27,580 --> 00:39:34,460
So is there, I mean, I know you and Mason and Dan, you guys studied like a framework for identifying Bitcoin treasury companies.

495
00:39:35,300 --> 00:39:42,520
Do we have some basic frameworks where we can just be like, hey, if they've got secured debt, we're staying away from those companies?

496
00:39:42,520 --> 00:39:46,520
or what do you think the top red flags are

497
00:39:46,520 --> 00:39:49,200
or how to, I guess, easily navigate this

498
00:39:49,200 --> 00:39:51,200
or do you just go with what you know?

499
00:39:52,880 --> 00:39:56,100
I was talking to Dan today about a framework

500
00:39:56,100 --> 00:40:00,440
or an idea of, I was thinking about theta decay,

501
00:40:01,100 --> 00:40:03,120
but with Bitcoin treasury companies,

502
00:40:03,120 --> 00:40:11,180
it's almost like time and scale makes it safer.

503
00:40:11,180 --> 00:40:17,720
so and as an investor if you get early on in the bitcoin treasury company you're rewarded

504
00:40:17,720 --> 00:40:24,560
proportionately to um the risk that you took right so if you were right in the beginning

505
00:40:24,560 --> 00:40:30,740
at strategy you've been rewarded enormously same thing with with meta planet but as these

506
00:40:30,740 --> 00:40:38,420
companies get larger and as they have the the flywheel in effect and they have attention and

507
00:40:38,420 --> 00:40:44,260
have capital and they can issue securities and they have a capital structure and they have trust

508
00:40:44,260 --> 00:40:52,820
that you know all the things that are important they become safer and in my opinion right now

509
00:40:52,820 --> 00:41:02,340
there's only two or three companies in the entire market which um show those those

510
00:41:02,340 --> 00:41:07,900
of yeah characteristics of being investment grade.

511
00:41:07,900 --> 00:41:15,440
Yeah, I think MetaPlanet was like the most important event really to happen because

512
00:41:15,440 --> 00:41:19,680
Saylor wrote the playbook, but then we don't really know if it's immaculate conception

513
00:41:19,680 --> 00:41:20,680
or not.

514
00:41:20,680 --> 00:41:24,440
Like Bitcoin can only happen once, you know, can strategy only happen once.

515
00:41:24,440 --> 00:41:29,460
But now MetaPlanet has proved you can run the playbook and it does work.

516
00:41:29,460 --> 00:41:36,580
So now we're going to see whether other companies are running that playbook correctly or maybe

517
00:41:36,580 --> 00:41:43,000
trying to skip a step and go straight for the home run.

518
00:41:43,000 --> 00:41:45,420
The companies that try to skip steps are going to get blown up.

519
00:41:45,420 --> 00:41:49,720
I think that those are going to be the ones that are the first dominoes to fall.

520
00:41:49,720 --> 00:41:53,260
The ones that are just following the playbook and are trying to be somewhat prescriptive

521
00:41:53,260 --> 00:41:54,260
in their approach.

522
00:41:55,220 --> 00:42:02,500
you know issuing equity buying bitcoin perhaps finding ways to issue debt buying bitcoin i think

523
00:42:02,500 --> 00:42:09,460
i think they will survive um if they're able to maintain that that model going the one the one

524
00:42:09,460 --> 00:42:16,100
thing about it is that i that also i think plays into a factor of how strategy is able to win we i

525
00:42:16,100 --> 00:42:21,460
think we forget that when they started this interest rates were lower and there was quantitative

526
00:42:21,460 --> 00:42:27,280
easing, right, in the form of stimulus. So they were able, they had some advantageous

527
00:42:27,280 --> 00:42:31,900
market dynamics that were working in their effect just ever so slightly when they first

528
00:42:31,900 --> 00:42:37,140
started. Right now, we have a different interest rate environment. We have a different set

529
00:42:37,140 --> 00:42:41,060
of economic dynamics. We have, you know, I mean, the tariff situation is probably going

530
00:42:41,060 --> 00:42:46,380
to get rectified. We've got other scenarios in place right now that make this a little

531
00:42:46,380 --> 00:42:50,760
bit different for how these companies are going to have to assess it.

532
00:42:50,760 --> 00:42:56,700
Now, back to what Mason was saying, in terms of the flywheel, and this is something I'm

533
00:42:56,700 --> 00:43:03,060
trying to reconcile, is it truly the flywheel if they can't use debt and equity?

534
00:43:03,060 --> 00:43:05,880
Is it a flywheel if they're only using equity?

535
00:43:05,880 --> 00:43:10,340
Right now, Saylor can do the flywheel with only equity because he has multiple levers

536
00:43:10,340 --> 00:43:12,840
that he can pull for the ATM.

537
00:43:12,840 --> 00:43:18,140
Some of these other companies, and Metaplan has some debt that they've used too, and similar.

538
00:43:18,140 --> 00:43:24,020
of these other companies, however, they're not using debt yet. So is that still a flywheel

539
00:43:24,020 --> 00:43:29,820
approach or is that like a more of a dedicated, strictly Bitcoin treasury approach? And we're

540
00:43:29,820 --> 00:43:32,960
saying that Bitcoin is going to appreciate in value. We want it on the balance sheet. We're

541
00:43:32,960 --> 00:43:37,760
going to use that to strengthen our company and invest in the core business and so on and so forth

542
00:43:37,760 --> 00:43:42,140
and becomes like a different flywheel. Like what is the flywheel? Is the flywheel just

543
00:43:42,140 --> 00:43:47,400
accretive Bitcoin purchases going back and forth by different means? Or is there also another flywheel

544
00:43:47,400 --> 00:43:52,040
that says we are acquiring bitcoin the bitcoin's going to appreciate in value that's going to swell

545
00:43:52,040 --> 00:43:55,480
our market cap that's going to give us opportunities to invest back in our core business which will

546
00:43:55,480 --> 00:44:00,200
then increase the sentiment around the stock which will then increase our ability to buy more bitcoin

547
00:44:00,200 --> 00:44:03,560
do you see what i'm saying i think there's two different flywheel models that we can yeah

548
00:44:05,240 --> 00:44:09,480
i like i've been thinking about this and i really think it's a race to get the preferreds and

549
00:44:09,480 --> 00:44:17,560
specifically to get a preferred like stride which is that junk bond uh like preferred and i i think

550
00:44:18,920 --> 00:44:26,760
a few episodes ago dan and i shamed our shared our framework for sorry my dog's barking uh for

551
00:44:27,400 --> 00:44:33,560
what makes a bitcoin treasury investment grade and one of those key metrics was to be able to defend

552
00:44:33,560 --> 00:44:42,840
the mnav regardless of of market condition right so if we get into a bear market and you're able to

553
00:44:42,840 --> 00:44:50,200
sell stride the the junk bond preferred and buy back stock you're able to defend the one mnav and

554
00:44:50,840 --> 00:44:57,480
that to me is a real justification for having a higher multiple and it takes some of the risk away

555
00:44:58,120 --> 00:45:03,400
dan do you have any other thoughts i feel very strongly about that and agree i also think the

556
00:45:03,400 --> 00:45:10,200
game the ball is shifting towards preferreds like ultimately what is the unlock the actual unlock

557
00:45:10,200 --> 00:45:15,160
here it's the arbitrage between the the bitcoin kegger and the fiat kegger that's essentially what

558
00:45:15,160 --> 00:45:19,560
strategy's created and so they've been able to do that in the equity markets by essentially selling

559
00:45:20,120 --> 00:45:25,480
fiat or you know i don't know if you can call it fiat but mstr equity and buying a higher kegger

560
00:45:25,480 --> 00:45:29,640
asset now they're able to sell it's very it's very specific what they're able to sell it's

561
00:45:29,640 --> 00:45:35,320
a 10 kager asset strife or stride for a 30 kager asset and they can do it without any negative

562
00:45:35,320 --> 00:45:38,920
pressure on the equity and that makes the equity that much more attractive and it's essentially

563
00:45:38,920 --> 00:45:42,200
yield on their bitcoin and i know a lot of people are saying they're not getting yield on their

564
00:45:42,200 --> 00:45:47,320
bitcoin their bitcoin isn't productive i'd argue this is the like the craziest arbitrage of all

565
00:45:47,320 --> 00:45:51,480
time and i think if you're a bitcoin hold like this is something really you you can only do if

566
00:45:51,480 --> 00:45:57,400
you have a large stack of bitcoin and if you have the um the pieces in place to issue these preferreds

567
00:45:57,400 --> 00:46:10,220
So I think I really do believe the preferreds are the banking strategy has become has shifted into sort of a financial product offering vehicle or closer to that of a bank than its peers.

568
00:46:10,220 --> 00:46:15,780
yeah i think i've been thinking about a lot as well and i've been trying to figure out

569
00:46:15,780 --> 00:46:21,960
if the bitcoin treasury companies who just buy bitcoin and maybe they offer products and services

570
00:46:21,960 --> 00:46:26,800
and so they've got profits if they're just in a complete completely separate bucket and the

571
00:46:26,800 --> 00:46:31,320
leveraged plays and i think you're right and i only just thought of it as soon as you said it

572
00:46:31,320 --> 00:46:36,920
but yeah if you're going to get into the leverage you have to have a stride because if you're going

573
00:46:36,920 --> 00:46:42,760
to lever up you have to be able to defend your m nav in a bear but if you're just going to be like

574
00:46:42,760 --> 00:46:49,080
um i guess my favorite example is probably like a tesla like if you're just going to offer you're

575
00:46:49,080 --> 00:46:53,660
just going to try to dominate the world with your products and you'll just stack some sats

576
00:46:53,660 --> 00:47:00,720
that's kind of fine too as long as you're uh you know as long as you're you have inflows and you

577
00:47:00,720 --> 00:47:08,080
can use that to make purchases um yeah that's that's a company that's a company that holds

578
00:47:08,080 --> 00:47:12,720
bitcoin in their treasury right that's not a bitcoin treasury company and that's that's the

579
00:47:12,720 --> 00:47:17,220
key distinction here well what's the way that's giving me what's what's the difference a company

580
00:47:17,220 --> 00:47:24,280
that holds bitcoin in their treasury versus a bitcoin treasury company well yeah you're using

581
00:47:24,280 --> 00:47:31,880
you're using bitcoin treasury as like lbe right yeah lb yes yeah but i think like like the pierre

582
00:47:31,880 --> 00:47:38,360
like bitcoin treasury company like that's what they do is they have a bitcoin treasury and hence

583
00:47:38,360 --> 00:47:46,600
they offer a suite of financial products based off of that and that's i think that's the ultimate goal

584
00:47:46,600 --> 00:47:53,480
here for these micros and we'll see which ones can do it and i think i think and really importantly

585
00:47:53,480 --> 00:47:57,640
i think and we've talked about this before but i think we should say it again there's two ways to

586
00:47:57,640 --> 00:48:03,240
defend that m nav and it's essentially bitcoin yield in a depressed m nav in a depressed m nav

587
00:48:03,240 --> 00:48:08,040
environment and the only two ways to do that are either to offer a junk bond to defend that m nav

588
00:48:08,040 --> 00:48:13,880
create leverage and hopefully the price of bitcoin rises or and to defend a sub one end nav or to

589
00:48:13,880 --> 00:48:17,480
have an operating company you can just have an operating business that spits off significant

590
00:48:17,480 --> 00:48:23,000
amount of cash flow such that buying bitcoin with that cash flow increases uh your bitcoin yield

591
00:48:23,000 --> 00:48:26,840
like if you have a significant operating business relative to your bitcoin stack you don't need a

592
00:48:26,840 --> 00:48:32,040
stride you don't need any of that because you have the ability to generate bitcoin yield in a one m

593
00:48:32,040 --> 00:48:38,520
nav environment so uh maybe maybe i want to bring this up for consideration should we be careful

594
00:48:38,520 --> 00:48:44,440
about the notion of defending mnav because you can't really defend sentiment you can only create

595
00:48:45,240 --> 00:48:49,880
the opportunity for sentiment to increase like like kind of like what i'm thinking so if there

596
00:48:49,880 --> 00:48:56,740
if we are in an environment where sentiment is suppressed for whatever reason, right,

597
00:48:56,740 --> 00:49:00,540
whatever variety of reasons, is that still possible?

598
00:49:02,520 --> 00:49:10,340
I mean, I think you're right in a sense, but it's almost kind of like the ability to defend MNav

599
00:49:10,340 --> 00:49:16,440
is what creates the sentiment for the market to not, like, push it.

600
00:49:17,660 --> 00:49:18,900
I think that's an assumption, though.

601
00:49:19,880 --> 00:49:21,260
Yeah, absolutely.

602
00:49:21,580 --> 00:49:22,760
Yeah, I'm not stating that as a fact.

603
00:49:22,840 --> 00:49:23,780
That's just my opinion.

604
00:49:24,560 --> 00:49:26,740
Well, let's talk about the mechanisms.

605
00:49:27,440 --> 00:49:28,640
Let's think through the mechanisms.

606
00:49:28,780 --> 00:49:29,700
How would they defend MNF?

607
00:49:30,680 --> 00:49:33,900
If the MNF falls below one, they issue stride and buyback the stock.

608
00:49:34,220 --> 00:49:34,760
It goes to one.

609
00:49:34,840 --> 00:49:35,080
Right.

610
00:49:35,080 --> 00:49:37,880
So that is the issue of defending MNF.

611
00:49:38,340 --> 00:49:38,780
Right.

612
00:49:38,980 --> 00:49:41,300
And that's essentially what the assumption is.

613
00:49:41,500 --> 00:49:47,720
So let's say that they buyback the stock and they're doing that to, quote, unquote, defend the MNF.

614
00:49:47,720 --> 00:50:10,650
The theory is that you buying back a stock buyback is saying in theory usually a stock buyback increases the equity price because people are saying that because you have strength you believe in the company you believe in the value of the company so you willing to buy back the stock in this model doesn that signal to the market the stock

615
00:50:10,650 --> 00:50:15,610
is the market the company is weak so therefore we need to buy back the stock it's an entirely

616
00:50:15,610 --> 00:50:22,090
different um thesis for the buyback of the stock one that gets pretty like existential like then

617
00:50:22,090 --> 00:50:27,610
you then you get start getting into the territory of the fact that common equity has no claim over

618
00:50:27,610 --> 00:50:32,410
the assets of the corporation and like you could say it's all fugazi and like i don't know i just

619
00:50:32,410 --> 00:50:37,690
think i'm on service right right because what i'm saying is that mnav is sentiment so that will play

620
00:50:37,690 --> 00:50:43,450
into it is what i'm trying to say yeah how the market perceives the action i'm not saying that

621
00:50:43,450 --> 00:50:48,010
whether they can or can't do it i'm talking about the market perception of the action can create

622
00:50:48,010 --> 00:51:01,290
an equal and opposite reaction maybe i think m nav is also a function of an expectation of yield

623
00:51:01,930 --> 00:51:09,050
right and when we're going into a bear market and maybe the expectation is there's going to be no

624
00:51:09,050 --> 00:51:16,090
yield because all of this is going to fall apart the the flywheel is going to you know stop uh and

625
00:51:16,090 --> 00:51:20,170
and then they buy back the stock and they create yield,

626
00:51:22,170 --> 00:51:27,170
that is kind of, that in my eyes,

627
00:51:27,370 --> 00:51:31,270
justifies an MNAV increase, right?

628
00:51:31,270 --> 00:51:33,970
Because you are creating yield once again.

629
00:51:33,970 --> 00:51:37,730
So you are creating yield regardless of market conditions.

630
00:51:37,730 --> 00:51:39,690
And that's what's so key here.

631
00:51:39,690 --> 00:51:40,650
Yeah.

632
00:51:40,650 --> 00:51:42,090
Well, for me, I guess maybe it's

633
00:51:42,090 --> 00:51:43,150
because I think about it differently.

634
00:51:43,150 --> 00:51:44,850
I don't care about Bitcoin yield.

635
00:51:44,850 --> 00:51:49,030
So that's why for me, I perceive it differently.

636
00:51:49,230 --> 00:51:49,950
I care about outperformance.

637
00:51:49,950 --> 00:51:50,390
Yes.

638
00:51:51,390 --> 00:51:52,270
That would be different then.

639
00:51:52,750 --> 00:51:53,950
You don't care about outperformance.

640
00:51:54,190 --> 00:51:55,110
Speaking of outperformance.

641
00:51:55,770 --> 00:51:57,330
So I care about outperformance.

642
00:51:57,550 --> 00:52:00,510
So Bitcoin per share and Bitcoin yield, I don't care about them whatsoever.

643
00:52:01,290 --> 00:52:08,490
I just care about what is the proportional dollar value that I'm getting for every dollar I have in strategy versus every dollar I have in Bitcoin.

644
00:52:08,770 --> 00:52:13,410
As long as that outperforms or that will outperform over time, that is my primary concern.

645
00:52:13,410 --> 00:52:23,250
And what I'm trying to say is that I don't think that the individuals that have the ability to impact this market care about Bitcoin yields or Bitcoin per share.

646
00:52:23,470 --> 00:52:25,450
They care about how they can impact the stock.

647
00:52:26,530 --> 00:52:29,950
So regardless of what action, I'm just trying to play devil's advocate here.

648
00:52:30,610 --> 00:52:37,930
Regardless of what actions strategy takes to defend MNAV, we need to be mindful of the opposite reaction that can occur.

649
00:52:38,330 --> 00:52:39,350
I see what you're saying.

650
00:52:40,070 --> 00:52:47,270
because so in my view yes they can use this to theoretically quote unquote defend mnav

651
00:52:47,270 --> 00:52:52,230
but the flip side of it if i was a market player i would see that as a moment of weakness and i

652
00:52:52,230 --> 00:53:01,590
would attack which is your saying and i would say they're weak already right yeah but i would say

653
00:53:02,310 --> 00:53:06,710
i would say that's a function of liquidity in the market so you're you're essentially saying the

654
00:53:06,710 --> 00:53:12,150
shorts will pile on even if they're buying backs so you're saying mnav's falling sentiments dropping

655
00:53:12,150 --> 00:53:16,870
you don't care about bitcoin yield that's all fugazi shorts are piling on and they can keep

656
00:53:16,870 --> 00:53:22,870
driving the stock down keep driving the stock down liquidity is falling x y and z the only way to

657
00:53:22,870 --> 00:53:30,230
defend against that is to create less liquidity in the market for shorts so correct that's why i think

658
00:53:30,230 --> 00:53:34,630
buying back the stock is actually effective there because you're putting it but it'll be large enough

659
00:53:34,630 --> 00:53:40,150
well that's all i'm saying what would be a large enough volume that's that's what i'm getting at

660
00:53:40,150 --> 00:53:45,830
right so and again guys this is not me saying strategies for guys i'm just trying to play the

661
00:53:45,830 --> 00:53:51,750
devil's advocate here what i'm what i'm saying is if strike strife stride if the preferreds if the

662
00:53:51,750 --> 00:53:58,950
market especially stride are large enough to offset that balance that is golden however if

663
00:53:58,950 --> 00:54:05,670
this were to occur before they have the volume in stride to offset the potential short shorting

664
00:54:05,670 --> 00:54:12,310
volume and to create enough of a of a dis of an imbalance in the in the liquidity to eventually

665
00:54:13,110 --> 00:54:16,870
drive the stock price up and changes and have the sentiment change and so on and so forth

666
00:54:18,310 --> 00:54:23,350
it would need to be large enough to do that so if this were to occur before those those

667
00:54:23,350 --> 00:54:29,510
preferreds and those markets grow large enough that is a scenario where i can see if someone has

668
00:54:29,510 --> 00:54:35,030
my mindset of they're not necessarily worried about i don't think market players are worried

669
00:54:35,030 --> 00:54:40,230
about yield per share or or the uh bitcoin per share or bitcoin yield they're looking for

670
00:54:40,230 --> 00:54:45,670
opportunities to create money-making ventures for themselves if this signals to the if this can

671
00:54:45,670 --> 00:54:51,830
signal to the market that strategy has an effective way to buy back the stock and they can defend the

672
00:54:51,830 --> 00:54:56,790
mnav it that's one side of the equation the other side of the equation is they are in a weakened

673
00:54:56,790 --> 00:55:03,270
position will that attract short interest that's that's all i'm saying so for me go ahead finish

674
00:55:03,270 --> 00:55:08,550
your thoughts sorry yeah so for me as an investor that does not care about bitcoin yield or bitcoin

675
00:55:08,550 --> 00:55:16,710
per share i can easily see a scenario where that happens so you would short so you would feel

676
00:55:16,710 --> 00:55:23,430
comfortable shorting if msdr was buying back i wouldn't i'm saying i'm saying that there are

677
00:55:23,430 --> 00:55:28,230
market players that could and would yeah but like where would you put your money i'd make a massive

678
00:55:28,230 --> 00:55:33,990
but if strategy had a 30 debt ratio and they were buying back their stock sub one m nav was stride

679
00:55:35,590 --> 00:55:39,750
like i've always decided decisions are made by where you put your money i would not be short there

680
00:55:40,870 --> 00:55:44,310
yeah i think a lot of the you're saying that as a you're saying that as an investor not an

681
00:55:44,310 --> 00:55:50,470
opportunistic player opportunistically i wouldn't be short there i i think all the short the the

682
00:55:50,470 --> 00:55:54,870
the opportunistic short sellers right now are trying to drive it to one and then they're out

683
00:55:56,230 --> 00:56:04,150
i mean beyond beyond the the convertible bond guys i i think it's tough yeah exactly like it's

684
00:56:04,150 --> 00:56:13,270
it's tough to make channel said that if it goes to one he's out so but yeah i i mean i think i

685
00:56:13,270 --> 00:56:19,030
think the important point here is that um in a bear market there's always pain right and maybe

686
00:56:19,030 --> 00:56:25,910
this makes it slightly less painful and maybe that's a middle ground that we can come to maybe

687
00:56:26,790 --> 00:56:31,270
yeah let me let me see let me see if i understand it adrian so i was gonna i was gonna i was gonna

688
00:56:31,270 --> 00:56:37,990
chime in oh yeah go ahead right so look you've been signing this whole time i'm just i've been

689
00:56:37,990 --> 00:56:42,710
listening to what you guys have been talking about it's pretty simple number needs to go up

690
00:56:43,270 --> 00:56:48,830
Say I don't care the reason what's happening number needs to go up for MSTR

691
00:56:49,010 --> 00:56:54,030
Same thing for strike and strife and stride whatever the reasons are for this the number needs to go up

692
00:56:54,250 --> 00:56:58,030
Whatever the mechanics of this need to happen. It's clearly obvious

693
00:56:58,030 --> 00:57:02,610
There's too many MSTR shares floating around right now, which is causing a depressed price

694
00:57:02,610 --> 00:57:08,490
Whatever term you want to use depressed or lower price. There's too many shares out there if they have to buy back shares

695
00:57:08,590 --> 00:57:12,730
It's the kiss of death. It just is and the reason why

696
00:57:13,270 --> 00:57:34,830
I got a real Coke. And the reason why it's a kiss of death is because what happens is the reason why a company buys back stocks is a very particular reason. Because if a company is sitting on a lot of cash and they buy back the stock, what happens is it reduces the float that's out there and therefore the stock price goes up. That's a non-taxable event.

697
00:57:34,830 --> 00:57:37,070
because the worst is to say,

698
00:57:37,190 --> 00:57:38,930
let's say you're Apple and you're sitting on whatever,

699
00:57:39,350 --> 00:57:41,290
80 or $100 billion in cash.

700
00:57:41,430 --> 00:57:44,230
If you give that cash instead of as a stock buyback,

701
00:57:44,310 --> 00:57:45,530
if you give that as a dividend,

702
00:57:46,450 --> 00:57:50,010
the investors in the ETFs or hedge funds hate that

703
00:57:50,010 --> 00:57:52,530
because you just triggered a taxable event for them.

704
00:57:52,810 --> 00:57:54,050
They don't want taxable events.

705
00:57:54,130 --> 00:57:55,910
And that's why they do these stock buybacks.

706
00:57:56,510 --> 00:57:57,970
And so what's happening here is,

707
00:57:57,990 --> 00:57:59,950
is that if they have to do a stock buyback,

708
00:58:00,090 --> 00:58:01,570
that's validation that they floated

709
00:58:01,570 --> 00:58:02,930
too many shares in the market.

710
00:58:02,930 --> 00:58:04,950
It doesn't matter how accretive it is.

711
00:58:05,030 --> 00:58:08,090
It signals the market there's too many shares that are out there.

712
00:58:08,590 --> 00:58:12,310
Now, whether you're going to short when it's down or you're going to short when it's up,

713
00:58:12,550 --> 00:58:13,790
it doesn't matter to me.

714
00:58:13,890 --> 00:58:15,170
The number needs to go up.

715
00:58:15,570 --> 00:58:19,790
What I can tell you is that if Bitcoin hits an all-time high two weeks from now, pick a

716
00:58:19,790 --> 00:58:28,110
dollar amount, $112,000, $114,000, and strategy is bouncing around at $425,000 a share, not

717
00:58:28,110 --> 00:58:28,410
good.

718
00:58:28,730 --> 00:58:31,530
And one of the reasons why is there's so many other choices to buy.

719
00:58:31,530 --> 00:58:36,350
strike, strife, stride, whatever. You could buy all the other Bitcoin treasury companies,

720
00:58:36,350 --> 00:58:39,230
no matter how terrible you might think they are, how good you think they are.

721
00:58:39,430 --> 00:58:46,250
That is taking that buying pressure off. And the $4 billion in asset or whatever that's making up

722
00:58:46,250 --> 00:58:52,410
Misty is preventing it from going higher based upon the call options that are on it, the covered

723
00:58:52,410 --> 00:58:57,730
calls. And that is bled out, not from the MSTR shares, that used to be buying the shares and now

724
00:58:57,730 --> 00:59:04,210
let out so now given that does everybody agree that the number needs to go up on mstr shares

725
00:59:04,210 --> 00:59:11,250
and strike and strife and so forth well so i'm what i'm doing yes i don't okay but i don't i don't

726
00:59:11,250 --> 00:59:15,730
want to be that simple with it though what i'm what i've been trying to to think through myself

727
00:59:15,730 --> 00:59:25,810
is the preferred offerings are fantastic i think that they are a way for strategy to create new

728
00:59:25,810 --> 00:59:33,330
markets have different levers they can pull they can defend mnaf i agree with all of that but i have

729
00:59:33,330 --> 00:59:38,850
to take the opposite side to make sure that my thesis is strong now the opposite side of that is

730
00:59:38,850 --> 00:59:43,330
strike stripe and stride they essentially dilute the volatility profile of the stock because people

731
00:59:43,330 --> 00:59:47,490
that would have bought the common could not buy the prefers so you have you've created a larger

732
00:59:47,490 --> 00:59:53,890
market but you've also indirectly pulled attention away from the common stock in a way exactly no i

733
00:59:53,890 --> 00:59:56,750
I totally agree with you because now they have other alternatives to buy.

734
00:59:57,410 --> 00:59:57,690
Right.

735
00:59:57,870 --> 01:00:05,350
Now, in that scenario, what is good and why strategy is going to win long term is because

736
01:00:05,350 --> 01:00:07,870
Saylor is creating an economy with all of that.

737
01:00:07,950 --> 01:00:10,810
With all these different offerings, he's attracting different players to the market

738
01:00:10,810 --> 01:00:12,770
for different reasons, and the market is strategy.

739
01:00:13,550 --> 01:00:14,550
So that's perfect.

740
01:00:15,130 --> 01:00:20,090
However, if we do have a scenario where they have to, quote, unquote, defend MNAV by using

741
01:00:20,090 --> 01:00:31,530
stride to buy the common stock, that needs one primary, I think, buffer. That stride needs to

742
01:00:31,530 --> 01:00:37,070
have enough volume and enough size to absorb enough shares to offset that. So the only reason

743
01:00:37,070 --> 01:00:45,350
why I brought it up is because they can defend MNAV with that, but they need to be able to absorb

744
01:00:45,350 --> 01:00:50,990
enough of the shock and absorb enough of the shares rather to offset whatever

745
01:00:50,990 --> 01:00:55,790
whatever low sentiment environment that they're facing so this isn't me saying

746
01:00:55,790 --> 01:00:59,630
that you know strategy is gonna fail it's it's guys you know or anything like

747
01:00:59,630 --> 01:01:05,810
that I'm just saying that people have have to test their thesis and this is

748
01:01:05,810 --> 01:01:11,750
just me testing my thesis in real time yeah so let me let me address a couple

749
01:01:11,750 --> 01:01:16,790
points go ahead mason i i just want to ask you a question what do you what do you mean by too many

750
01:01:16,790 --> 01:01:23,590
shares like like relative to what relative to what so you have to think about it they floated 20

751
01:01:23,590 --> 01:01:27,190
more shares in the fourth quarter when they bought 15 billion dollars worth of bitcoin

752
01:01:27,190 --> 01:01:33,350
which caused the price to collapse from 540 down okay so they floated all those shares to buy 15

753
01:01:33,350 --> 01:01:39,910
billion dollars of bitcoin was that a once in a a once in a one-time scenario sure but what they

754
01:01:39,910 --> 01:01:46,230
had committed to in the 42 plan that came out in third quarter, which was implemented

755
01:01:46,230 --> 01:01:52,710
in fourth quarter, was you have to realize, so when that happened was they committed to

756
01:01:52,710 --> 01:01:55,450
that for that to take place in three years.

757
01:01:55,450 --> 01:01:59,190
But he did it in approximately two, three weeks.

758
01:01:59,190 --> 01:02:07,230
And so by flooding those shares, because the volatility was 220%, Saylor sold the volatility

759
01:02:07,230 --> 01:02:14,350
buy the lower volatility item, the instrument. The lower volatility instrument was Bitcoin,

760
01:02:14,350 --> 01:02:20,350
because the MNAV means that this is more volatile than Bitcoin because it trades on a multiple to

761
01:02:20,350 --> 01:02:25,950
net asset value. We all get this. So what Saylor did is he sold that volatility and he bought the

762
01:02:25,950 --> 01:02:32,830
low volatility instrument to create a higher NAV. That's exactly what he did. Now, what he did was

763
01:02:32,830 --> 01:02:38,190
he sold more shares into the network i don't own those new shares everybody on this call does not

764
01:02:38,190 --> 01:02:45,390
own those new shares unless they go out and buy them so while the it was still accretive per share

765
01:02:46,030 --> 01:02:51,870
the number of shares increased that you did not own which caused the price of the stock to collapse

766
01:02:52,830 --> 01:02:57,630
guys this is simple i don't know if i agree with that point but great great grant explain to me

767
01:02:57,630 --> 01:03:02,270
this so if you're sitting in november would you have preferred strategy had bought no bitcoin

768
01:03:02,270 --> 01:03:03,170
between now and November?

769
01:03:03,450 --> 01:03:04,990
And would we be trading in a 5MNAV?

770
01:03:05,950 --> 01:03:06,850
I don't think any...

771
01:03:06,850 --> 01:03:08,030
Well, you answer that for me.

772
01:03:08,570 --> 01:03:12,130
And how do you justify a hired MNAV with no Bitcoin yield?

773
01:03:13,810 --> 01:03:15,590
Okay, let me answer two questions.

774
01:03:15,790 --> 01:03:17,330
I believe the first question from you, Dan,

775
01:03:17,370 --> 01:03:18,430
was what would I have preferred?

776
01:03:18,950 --> 01:03:20,750
I would have preferred that he would have waited

777
01:03:20,750 --> 01:03:23,770
until January 17th to see what would have happened

778
01:03:23,770 --> 01:03:26,190
on that expiration date that we were all waiting for,

779
01:03:26,590 --> 01:03:28,350
given the amount that we were expecting,

780
01:03:28,850 --> 01:03:30,970
this open interest that was still in place.

781
01:03:30,970 --> 01:03:49,010
I would have thought that he would have waited through at least the last six weeks of the year to pump that up, to close out the year with a high Bitcoin price, and then to go and then realize those gains on February 1st, then that would have happened for the fourth quarter to realize that gain on the stock.

782
01:03:49,010 --> 01:03:50,590
We know that he didn't do that.

783
01:03:50,930 --> 01:03:57,350
And what happened in Q1, again, the price of Bitcoin was below their acquisition price.

784
01:03:57,730 --> 01:04:00,090
So then what happened is they reported a negative number.

785
01:04:00,530 --> 01:04:01,350
Those were not good.

786
01:04:02,010 --> 01:04:05,010
So those metrics that are now following it, now we're coming into Q2.

787
01:04:05,550 --> 01:04:08,530
So we need Bitcoin to stay above $96,000 and change.

788
01:04:08,610 --> 01:04:10,210
Let's just say it's $97,000.

789
01:04:10,410 --> 01:04:12,310
Hope that it stays at $107,000.

790
01:04:12,310 --> 01:04:16,430
And then we go back to the calculation that there'll be whatever the number is,

791
01:04:16,470 --> 01:04:18,530
a $14 billion gain on the books.

792
01:04:18,530 --> 01:04:30,190
But what we saw by the loss in Q1, which was announced that took place in April, it had virtually no effect on the price that there was an 82,000% loss.

793
01:04:30,550 --> 01:04:32,230
It had no effect on it.

794
01:04:32,550 --> 01:04:39,050
So the flip side is probably to just thinking logically that if they have a $14 billion gain, it won't make a difference.

795
01:04:40,530 --> 01:04:43,370
So now here's the good news.

796
01:04:43,430 --> 01:04:44,930
Here's the good news, what I'm going to tell you.

797
01:04:44,930 --> 01:04:50,770
The easiest way to sop up, and this message is to Saylor and to Fong if you're listening.

798
01:04:51,570 --> 01:04:51,790
Okay.

799
01:04:51,950 --> 01:04:57,490
The best thing is once you're eligible for S&P 500 is to get the S&P 500 inclusion.

800
01:04:57,490 --> 01:05:09,770
And the reason why is because of all the ETFs that will have to buy MSTR shares will suck up that $15 billion or $20 billion worth of shares,

801
01:05:10,030 --> 01:05:14,790
take that off of the market and reduce the shares that are actually being traded.

802
01:05:14,930 --> 01:05:22,670
If that happens, that's the easiest buyer that you will get to suck up the excess shares that are floating around.

803
01:05:22,990 --> 01:05:24,830
There's too many shares floating around.

804
01:05:25,570 --> 01:05:28,050
So, Mason, does that answer your question why there's too many shares?

805
01:05:29,130 --> 01:05:34,510
Yeah, I'm just having a hard time justifying a higher MNAV with no Bitcoin yield.

806
01:05:35,730 --> 01:05:36,510
I don't really care.

807
01:05:36,870 --> 01:05:38,890
Okay, go ahead.

808
01:05:38,890 --> 01:06:05,050
So, okay. The only thing that justifies a higher MNAB is market sentiment, in my view. I don't think that the Bitcoin yield or Bitcoin per share is what justifies the market sentiment. I think that when we saw the run up to 543, we had a lot of things working at our advantage. We had increasing liquidity at the time, and we had strong market sentiment because of what people are now calling a regular...

809
01:06:05,050 --> 01:06:08,010
Hey, let me jump into some of these comments.

810
01:06:08,150 --> 01:06:12,790
So the comment there's here is that I have no MSTR options at all.

811
01:06:13,370 --> 01:06:13,850
None.

812
01:06:14,070 --> 01:06:16,770
I closed out those positions three weeks ago.

813
01:06:17,050 --> 01:06:18,830
Three, four weeks ago, they're all gone.

814
01:06:19,190 --> 01:06:21,330
I have no MSTR options at all.

815
01:06:21,710 --> 01:06:27,490
So if anybody's saying sorry about your leave calls, sorry about your losses or whatever that is, guys, I don't have any.

816
01:06:27,670 --> 01:06:29,430
I sit in all spot shares.

817
01:06:29,670 --> 01:06:31,170
I've already announced what I've done.

818
01:06:31,250 --> 01:06:34,010
I've taken positions in other Bitcoin treasury companies.

819
01:06:34,010 --> 01:06:36,430
and I've done that weeks ago.

820
01:06:36,430 --> 01:06:37,630
So everybody's staying there.

821
01:06:37,630 --> 01:06:39,090
Now the person that talked about the Misty

822
01:06:39,090 --> 01:06:40,870
has a $4.5 billion,

823
01:06:40,920 --> 01:06:46,280
well that guy's right that's what's there and we've seen this happen before years with bitcoin

824
01:06:46,280 --> 01:06:51,480
so any og people know about this that over there is putting pressure not allowing the stock to run

825
01:06:51,480 --> 01:06:57,160
higher and there's too many shares floating around there's no if anybody wants to argue this the

826
01:06:57,160 --> 01:07:00,520
reason why they know there's too many shares floating around because you guys are talking

827
01:07:00,520 --> 01:07:04,680
about stock buybacks the only reason why you do stock buyback is because there's too many shares

828
01:07:04,680 --> 01:07:11,880
that are out there well i i don't know about that because misty and the cover call etfs have to be

829
01:07:12,600 --> 01:07:18,680
net positive they have to be net long all covered call strategies are limited bullish strategies so

830
01:07:18,680 --> 01:07:26,600
they have to have the shares equivalent in order to actually short it so i want to chime in the guy

831
01:07:26,600 --> 01:07:33,320
mstr hi you sold at the worst possible time ever don't worry about my positions okay just don't

832
01:07:33,320 --> 01:07:34,560
Don't worry about them at all.

833
01:07:35,020 --> 01:07:35,320
Okay?

834
01:07:35,920 --> 01:07:37,200
I announced to them, do it.

835
01:07:37,380 --> 01:07:38,900
If you ever want to get on a space,

836
01:07:39,040 --> 01:07:40,400
I'm going to say this to all the trolls

837
01:07:40,400 --> 01:07:42,260
that are going through here in the chat.

838
01:07:42,540 --> 01:07:45,120
Anytime you want to do a space, I'm ready.

839
01:07:45,660 --> 01:07:45,980
Okay?

840
01:07:46,360 --> 01:07:47,340
Contact somebody else

841
01:07:47,340 --> 01:07:49,040
because they only take DMs from people I follow.

842
01:07:49,380 --> 01:07:51,160
But if you guys want to get in a space with me,

843
01:07:51,360 --> 01:07:53,920
let's get on a space and let's talk it through

844
01:07:53,920 --> 01:07:55,700
and we'll have people ask you questions.

845
01:07:56,080 --> 01:07:58,800
Until then, so be it.

846
01:07:59,180 --> 01:07:59,420
Great.

847
01:07:59,420 --> 01:08:00,800
You want to teach the combat over here.

848
01:08:01,060 --> 01:08:02,320
Yeah, I'm fine with combat.

849
01:08:02,320 --> 01:08:05,340
We've been on a call for an hour here arguing about this.

850
01:08:05,420 --> 01:08:06,540
The number has to go up.

851
01:08:06,660 --> 01:08:07,420
It's that simple.

852
01:08:07,880 --> 01:08:11,500
And the way you get it to go up, as you guys just said, is either you buy the shares back

853
01:08:11,500 --> 01:08:14,120
or they get eligible for S&P 500.

854
01:08:14,280 --> 01:08:18,300
And those ETFs become the natural buyers to take those shares out of basically trading

855
01:08:18,300 --> 01:08:20,820
circulation, which could then cause it to go up.

856
01:08:21,080 --> 01:08:24,840
That's the only thing that'll be a big enough buyer to do this right now, because there's

857
01:08:24,840 --> 01:08:28,380
too many other shiny objects in the little Bitcoin treasury companies.

858
01:08:28,380 --> 01:08:47,220
Great. I was trying to get on board with what you were saying about hitting the ATM in November caused the drop. And the only way that I could kind of try to agree would be that selling ATM on the common lowers the leverage ratio. So maybe now the prices aren't as justified as they were.

859
01:08:47,220 --> 01:08:53,780
but why didn't you know why didn't the same thing happen or excuse me why did the same thing happen

860
01:08:53,780 --> 01:08:58,880
in march like we had a forex move and then we had a 50 correction and the same thing happened in

861
01:08:58,880 --> 01:09:04,280
november oh yeah and we and we never bait we never broke i've already talked about this multiple

862
01:09:04,280 --> 01:09:11,260
times we never broke the the uh multiple over the 50-day moving average it was a 2.47 in march what

863
01:09:11,260 --> 01:09:16,380
we had there comparing against itself and now it only hit 2.1 in november so we're having

864
01:09:16,380 --> 01:09:21,080
diminishing returns on the multiple of the 50-day moving average, comparing it against itself. And

865
01:09:21,080 --> 01:09:25,640
that takes into account all the net new shares that are out there and all unknown information.

866
01:09:26,140 --> 01:09:31,160
It's that simple. Now, let's tell you the flip side here. When the shares become hypothecated,

867
01:09:31,280 --> 01:09:34,440
which means there's a short on those, not enough share, I want to use the word short,

868
01:09:34,700 --> 01:09:39,460
there's not enough shares available. These shares are not hypothecated. If anybody goes in my feed

869
01:09:39,460 --> 01:09:43,920
and types grain of salt, types in the word hypothecation, dollar sign, MSTR, you'll see

870
01:09:43,920 --> 01:09:49,460
at the bottom of the bear market, those shares were shorted and they were paying 30% APR to me

871
01:09:49,460 --> 01:09:55,320
as I loaned those shares out. I was the person that owned the shares in the bear market and

872
01:09:55,320 --> 01:09:59,920
loaned it out to the guys to freaking short it even more because I went, as Dan said, when the

873
01:09:59,920 --> 01:10:07,000
pain happened and I went long and I'd made a big stack in there. So now we are here. Go ahead.

874
01:10:07,000 --> 01:10:17,380
What is a company you see in the Bitcoin space, the Bitcoin treasury space, that is superior

875
01:10:17,380 --> 01:10:21,760
to strategy right now because of the way they're acquiring Bitcoin and the way they're managing

876
01:10:21,760 --> 01:10:24,200
their outstanding flow?

877
01:10:24,200 --> 01:10:25,200
If we look at the metrics-

878
01:10:25,200 --> 01:10:28,760
There are people in the comments who are like, yeah, I totally agree with Green.

879
01:10:28,760 --> 01:10:30,000
You know, this is bullshit.

880
01:10:30,000 --> 01:10:31,240
This price isn't going up.

881
01:10:31,240 --> 01:10:35,040
So what would be your alternative for those people?

882
01:10:35,040 --> 01:10:38,840
that's where I'm going to make a distinction between two things. If we look at a base,

883
01:10:38,940 --> 01:10:43,520
there's two types of typically investors. There's either technicals or fundamentals.

884
01:10:44,060 --> 01:10:48,980
The technical people look at the stock, look at the price momentum, look at RSI, MACD,

885
01:10:49,160 --> 01:10:53,680
50-day moving average. The other people that typically invest are fundamental people. And

886
01:10:53,680 --> 01:10:58,560
what they do is they look at the income sheet and balance statement. You guys are talking

887
01:10:58,560 --> 01:11:03,260
fundamentals. You're talking the income sheet, balance statement, what they're holding in MNAP.

888
01:11:03,260 --> 01:11:12,380
So strategy collectively, MSTR, Strike and Strife are the best fundamentals in the market.

889
01:11:12,760 --> 01:11:16,040
But the technicals on MSTR right now suck.

890
01:11:17,340 --> 01:11:25,540
Now, on the other Bitcoin treasury companies, their fundamentals are like, eh, because they trade at a very high MNAV.

891
01:11:25,960 --> 01:11:28,940
So their fundamentals are very expensive.

892
01:11:29,020 --> 01:11:30,320
It's like a high PE ratio.

893
01:11:30,320 --> 01:11:32,460
It's an expensive stock.

894
01:11:33,260 --> 01:11:38,120
But from them, on a technical basis, they have lots of momentum and lots of volatility.

895
01:11:38,800 --> 01:11:40,960
So that's the difference that we're talking about here.

896
01:11:41,020 --> 01:11:42,360
You guys are talking fundamentals.

897
01:11:42,720 --> 01:11:46,880
I agree with you on that, that strategy has the best fundamentals.

898
01:11:47,300 --> 01:11:51,860
But on a technical basis, looking at our price momentum, terrible.

899
01:11:52,500 --> 01:11:53,300
We all agree on that?

900
01:11:55,380 --> 01:11:57,460
Yes, I do have a question about-

901
01:11:57,460 --> 01:11:57,920
Go ahead.

902
01:11:58,200 --> 01:11:58,860
Can I jump in here?

903
01:11:58,860 --> 01:12:05,580
i think this is just a like a fundamental philosophical difference between investor

904
01:12:06,700 --> 01:12:10,940
i consider myself an investor and a trader and i think it's just a difference

905
01:12:13,100 --> 01:12:20,940
of time preference i just have a lower time preference and i'm okay with strategy converting

906
01:12:21,580 --> 01:12:28,060
you know selling some shares and creating bitcoin because if you take sailors you know 20-year

907
01:12:28,060 --> 01:12:34,460
forecast where it's 21 million dollar bitcoin it's a 12 trillion dollar company and that's at no

908
01:12:34,460 --> 01:12:45,580
premium and i'm i think i'm just okay with that in the long term rather than you know going to some

909
01:12:45,580 --> 01:12:51,660
smaller potentially riskier thing and it sounds like you're not okay with it yeah i think that

910
01:12:51,660 --> 01:12:55,900
i'm not what we were talking about had nothing to do with the other lb other companies we were

911
01:12:55,900 --> 01:13:02,460
just talking about how can strategy um maintain their position and continue to grow and and buy

912
01:13:02,460 --> 01:13:08,780
bitcoin and continue with the strategy right and the reason why i brought up these counterpoints

913
01:13:08,780 --> 01:13:13,900
in these devil advocate positions is because as i said i was testing my thesis in real time so

914
01:13:14,860 --> 01:13:18,860
while it opened up a can of worms perhaps it was a good thing to do because the conversation

915
01:13:19,740 --> 01:13:26,220
actually happens so yes yes let me chime in mason to answer this why i'm out of patience

916
01:13:26,220 --> 01:13:32,300
i'll tell you there's a particular reason if we were in a bear market and currently the s p 500

917
01:13:32,300 --> 01:13:39,820
was 20 percent below uh um it's high price i'd be okay but the s p 500 is less than one percent

918
01:13:39,820 --> 01:13:47,740
away from its all-time high it closed today at 6 092. so once the s p 500 breaks 61 50 or whatever

919
01:13:47,740 --> 01:13:54,220
the all-time high was 6200 we're in a bull market and if you're in a bull market and that asset and

920
01:13:54,220 --> 01:14:01,180
an mstr sorry bitcoin is very close to an all-time high and your stock price is not running that is

921
01:14:01,180 --> 01:14:06,460
not good price action the fundamentals may be great i'll give you a good example there are

922
01:14:06,460 --> 01:14:12,940
companies that if i had to make a choice between amazon as a stock and google i pick google every

923
01:14:12,940 --> 01:14:17,860
single time. Why? Because Amazon has a million and a quarter employees. It's one of the largest

924
01:14:17,860 --> 01:14:23,220
employees in the world. So I don't like Amazon stock. Do I use their products every day and love

925
01:14:23,220 --> 01:14:29,240
the company? Sure. But I don't ever own Amazon stock. I prefer to have Google and have one-tenth

926
01:14:29,240 --> 01:14:36,260
the number of employees because humans are very expensive. So that's a difference between looking

927
01:14:36,260 --> 01:14:41,840
at two fundamentals of two good tech companies. We are in a bull market. We're very close. If

928
01:14:41,840 --> 01:14:48,720
anybody disagrees on the s p 500 we have a v-shaped recovery hell seven eight weeks ago people were

929
01:14:48,720 --> 01:14:53,440
talking about the demise of nvidia with open seek adrian what was the name of the company that came

930
01:14:53,440 --> 01:14:59,520
out the chinese company that made some free freaking software that crushed nvidia everybody's

931
01:15:00,800 --> 01:15:06,000
deep seek it wasn't open seek deep seek oh my god that was the biggest buying opportunity for

932
01:15:06,000 --> 01:15:08,400
Nvidia going who bought the dip.

933
01:15:08,400 --> 01:15:13,120
What's the, okay, so what's the message to investors? What's the other, what's the

934
01:15:13,120 --> 01:15:18,240
My message to investors is that you have to look at your allocation, your portfolio

935
01:15:18,240 --> 01:15:23,360
and giving trade the market you have and not the one that you want. And you have to be able to look

936
01:15:23,360 --> 01:15:28,720
and say, are we in a bear market or a bull market overall? Typically with presidential elections

937
01:15:28,720 --> 01:15:35,040
that take place the following year is the bull market for the last three cycles, 2017, 2021,

938
01:15:35,040 --> 01:15:39,680
and now 2025, they're all odd years. The following year after a presidential cycle

939
01:15:39,680 --> 01:15:46,560
is a complete coincidence of cosmic proportions, coincidence. So what I'm saying right now is that

940
01:15:46,560 --> 01:15:51,360
if the stock is not going up and you can avoid triggering taxable events, I'm not giving anybody

941
01:15:51,360 --> 01:15:57,600
tax advice, but in an IRA account, you have no taxable events, whether it's a Roth or rather

942
01:15:57,600 --> 01:16:03,600
a regular IRA account. What I have done, I've already announced it previously weeks ago.

943
01:16:03,600 --> 01:16:08,080
I sold the MSDR on the IRA account and I bought other Bitcoin treasury companies.

944
01:16:08,380 --> 01:16:13,620
Do I have millions of dollars of MSDR stock that's at a cost basis of 22 bucks?

945
01:16:14,220 --> 01:16:14,580
Yes.

946
01:16:14,800 --> 01:16:16,540
And that's in a taxable account.

947
01:16:16,940 --> 01:16:21,700
So those I don't sell, I got to sell those very slowly to take care of the taxable events

948
01:16:21,700 --> 01:16:24,100
that will trigger by selling those.

949
01:16:25,320 --> 01:16:31,120
So for anybody thinks, you know, and by the way, I just see this, NVIDIA is all time high.

950
01:16:31,120 --> 01:16:35,320
Well, I guess you should have bought it on the dip, whatever it was to everybody that's on the call.

951
01:16:35,460 --> 01:16:36,520
Did you buy the dip?

952
01:16:37,080 --> 01:16:40,360
You guys had this massive dip seven, eight weeks ago.

953
01:16:41,080 --> 01:16:41,520
Right.

954
01:16:41,660 --> 01:16:42,740
And it fully recovered.

955
01:16:43,380 --> 01:16:54,540
So if I agree that the number needs to go up, if we get a bear market or another bear cycle in Bitcoin, what does strategy do to make the number go up?

956
01:16:54,540 --> 01:16:56,320
I'm going to be real clear.

957
01:16:56,320 --> 01:17:01,160
If there's a bear cycle in 2025 and Bitcoin falls to-

958
01:17:01,160 --> 01:17:02,080
2026, 2027, whatever.

959
01:17:02,320 --> 01:17:02,680
I don't care.

960
01:17:02,980 --> 01:17:05,060
2026, 2027, guys, I'm not going to be on the call.

961
01:17:05,920 --> 01:17:09,420
I hope you guys, I hope we make enough money in 2025.

962
01:17:10,740 --> 01:17:14,720
Guys, look, we started, this is episode number 31.

963
01:17:14,980 --> 01:17:16,860
It's over a half a year and I've been in the trade.

964
01:17:16,940 --> 01:17:18,240
It'll be three years in January.

965
01:17:19,160 --> 01:17:21,220
It's not like I'm a new guy in this, right?

966
01:17:21,380 --> 01:17:24,140
I don't care about, right now, I don't care about 2026.

967
01:17:24,140 --> 01:17:49,520
I care about July. I care about the price of Bitcoin at the end of June so we can ascertain the gain that that MSTR will have. Right. We all care about that. I care about July 20th. That is the cutoff. Right. That is the cutoff for the digital asset working group that's running for the president. Mason, do you agree on all these points? You care about June 30th, correct? The price of Bitcoin.

968
01:17:50,420 --> 01:17:50,880
Oh, yeah.

969
01:17:51,520 --> 01:17:53,240
Yeah. OK. So we hope that the price.

970
01:17:53,240 --> 01:17:55,700
I care about the price of Bitcoin every day.

971
01:17:56,320 --> 01:17:56,500
Right.

972
01:17:56,600 --> 01:17:57,500
But June 30th is important.

973
01:17:57,500 --> 01:17:58,620
This is a lot of Bitcoin.

974
01:17:58,980 --> 01:18:00,080
A lot of fucking Bitcoin.

975
01:18:00,700 --> 01:18:00,920
Right.

976
01:18:01,020 --> 01:18:04,320
Because then we know what the gain that strategy will then report.

977
01:18:04,520 --> 01:18:04,720
Correct?

978
01:18:06,300 --> 01:18:06,500
Yeah.

979
01:18:07,020 --> 01:18:07,300
Okay.

980
01:18:07,440 --> 01:18:08,540
July 20th.

981
01:18:08,600 --> 01:18:10,300
That's when the working group has to come.

982
01:18:10,440 --> 01:18:14,340
They have their six-month site, their six-month timeline to reveal what they're going to do

983
01:18:14,340 --> 01:18:17,600
for the strategic Bitcoin fund and sovereign, whatever.

984
01:18:18,040 --> 01:18:19,380
The two things that they're going to do.

985
01:18:19,480 --> 01:18:20,580
We care about that also.

986
01:18:20,580 --> 01:18:25,280
The strategic Bitcoin reserve and the shares and the Bitcoin that they're going to keep.

987
01:18:25,620 --> 01:18:32,000
We also care about the Genius Act being finished and the stablecoin provision that's in it also.

988
01:18:32,460 --> 01:18:37,740
We need that to be signed off by the House of Reps and then signed into law by Trump.

989
01:18:37,880 --> 01:18:40,380
If that happens, those will be your catalysts.

990
01:18:40,560 --> 01:18:44,620
The Genius Act, stablecoins, June 30th and July 20th.

991
01:18:44,860 --> 01:18:49,300
Hopefully, we all agree on those things, that those things happen and the number continues to go up.

992
01:18:49,300 --> 01:19:09,840
We also hope that all the net new companies that are coming in that are buying Bitcoin, but not buying it at big enough numbers. You got Metaplanet that, I don't know, purchased whatever, 1,100 Bitcoins. That's great, but strategy has almost 600,000 Bitcoins. So it's a very small number. It's not big enough to drive the price of Bitcoin up.

993
01:19:09,840 --> 01:19:19,400
But if all the other big companies start buying this and it catches on, I want to see the positive, what do you call it, price action.

994
01:19:19,860 --> 01:19:25,060
And it's all about eligibility for the S&P 500 to sop up those shares that are floating around.

995
01:19:26,200 --> 01:19:30,240
I think I've been a completely rational person talking about this.

996
01:19:31,040 --> 01:19:35,140
I'd like to talk about some other things, but I want the stock price to go up.

997
01:19:35,840 --> 01:19:36,800
Yeah, that might be a good segue.

998
01:19:37,500 --> 01:19:38,640
Go ahead, Adrian.

999
01:19:38,640 --> 01:19:39,380
Were you going to respond to that?

1000
01:19:39,840 --> 01:19:46,000
Oh, no. I think I opened up enough of a can of worms with my comments, so I'm just going to let it ride and we can move on to a new topic now.

1001
01:19:46,480 --> 01:19:50,060
I just want to say that y'all wouldn't act like this if Dad was here.

1002
01:19:52,660 --> 01:19:56,340
I'm leaving the chat and you guys fucking acting a fool.

1003
01:19:56,500 --> 01:19:57,780
I have a great chart I want to show.

1004
01:19:58,500 --> 01:20:01,720
Oh, yeah. Do the chart and then maybe we'll talk about Prague. Happy fun stuff.

1005
01:20:02,200 --> 01:20:03,900
Cool. It's on the shared screen thing.

1006
01:20:04,400 --> 01:20:05,280
Oh, shit. Thanks.

1007
01:20:05,280 --> 01:20:15,840
uh this is strike percent of weekly volume back on um some fundamental stuff here

1008
01:20:17,160 --> 01:20:34,536
uh I think it pretty interesting uh when you look at it in terms of strife volume strike volume so these are the weekly volumes and strife and strike i use them liquidation preference times number of shares traded every week since strife and strike atms return online and um so it not totally accurate but it accurate within a few

1009
01:20:34,536 --> 01:20:39,976
percentage points and then you can see the weekly atm in both strike and strife and the final columns

1010
01:20:40,536 --> 01:20:47,016
are the final columns are strike percent of weekly volume and strife percent of weekly volume and

1011
01:20:47,016 --> 01:20:59,476
And this is a super key metric because obviously something we saw is that strategy wasn't really able to ever sell more than 7% of weekly volume in ATM comfortably.

1012
01:20:59,936 --> 01:21:13,556
And what they're able to do with these self-healing products that Ben talks about a lot is that they're able to ATM a huge percentage of the weekly trade volume in these two preferreds.

1013
01:21:13,556 --> 01:21:20,116
So I think if we just get a small increase in ATM or of trading volume in Strife and Strike,

1014
01:21:20,116 --> 01:21:25,156
those ATMs will continue to tick up in a really significant fashion. So I don't know, I just think

1015
01:21:25,156 --> 01:21:29,556
it's a really cool, if you look at these weekly volumes, you can see how well they're able to push

1016
01:21:29,556 --> 01:21:33,636
these products into the open market without having an adverse effect on the price. Like look at

1017
01:21:33,636 --> 01:21:38,916
Strife, look at Strike, they've traded flat for like three weeks and you can see their percentage

1018
01:21:38,916 --> 01:21:44,916
of weekly volume 30 31 18 like these are massive numbers and they're really going to be able to push

1019
01:21:44,916 --> 01:21:49,156
these products out once there becomes any substantial demand uh for them and i've been

1020
01:21:49,156 --> 01:21:55,156
you know doing my best uh to increase that demand so i think um that's exciting looking out on the

1021
01:21:55,156 --> 01:22:03,956
horizon yeah just ballparking it um is do you have a projection for how many bitcoin they might

1022
01:22:03,956 --> 01:22:12,316
accumulate just from preferreds i have yeah i have a full i have a um sheet or let's not get

1023
01:22:12,316 --> 01:22:16,776
into it now but yeah yeah we'll say that for another time yeah but it's massive right they

1024
01:22:16,776 --> 01:22:21,176
have at least they have eight to twenty billion worth of uh room on their balance sheet for

1025
01:22:21,176 --> 01:22:24,896
preferreds depending on upon whether or not the converts convert i assume the converts will

1026
01:22:24,896 --> 01:22:29,116
convert during the next run-up in stock price they won't issue more maybe ben thinks they'll

1027
01:22:29,116 --> 01:22:34,916
issue more. I'm not sure, but it all comes down to demand for the preferreds. And I'm just going to

1028
01:22:34,916 --> 01:22:40,436
reiterate, I'm going to say it again. What is strike? I mean, you're getting the ability to

1029
01:22:40,436 --> 01:22:49,756
buy one MNav MSTR with an 8% fixed coupon and perpetual upside on the equity. If you have cash,

1030
01:22:49,756 --> 01:22:54,816
if you're diversified between MSTR and cash or a bond or something, this is the product you want.

1031
01:22:54,816 --> 01:22:57,816
So it's just really, really attractive.

1032
01:22:57,816 --> 01:23:00,816
And the fact the way it's priced now, I did a little post on it earlier,

1033
01:23:00,816 --> 01:23:07,816
but it could perform on par with MSTR up to $650, $700 MSTR.

1034
01:23:07,816 --> 01:23:10,816
So that's really attractive with very little downside risk.

1035
01:23:10,816 --> 01:23:11,816
So that's really something to look out for.

1036
01:23:11,816 --> 01:23:13,816
And then obviously there's ATM risk.

1037
01:23:13,816 --> 01:23:16,816
Like if ATM suppresses the price, then maybe the yield stays high.

1038
01:23:16,816 --> 01:23:20,816
But there's just a lot of a lot of upside with that product.

1039
01:23:20,816 --> 01:23:25,976
yeah i mean the thing with the thing with all of this um and to everyone in the chat to everyone on

1040
01:23:25,976 --> 01:23:34,176
the call we all well let me be more specific here most of us do believe in the long-term

1041
01:23:34,176 --> 01:23:39,516
viability of strategy right but if we are the investment grade podcast i do believe we have

1042
01:23:39,516 --> 01:23:45,576
to test our thesis so there's nothing wrong with that so grain providing that perspective and me

1043
01:23:45,576 --> 01:23:49,236
providing my perspective and dan and mason providing their perspective is exactly why we're

1044
01:23:49,236 --> 01:23:58,716
here. With that said, I think strategy is at 391 right now. So it's not as if the investment thesis

1045
01:23:58,716 --> 01:24:04,736
has fallen apart. It is just good to test your investment thesis, right? So all this conversation

1046
01:24:04,736 --> 01:24:10,396
is great. And I think Dan's point about all the prefers is very well taken. They are very powerful

1047
01:24:10,396 --> 01:24:15,436
tools that I think the market is grossly underestimating. What we just need to make

1048
01:24:15,436 --> 01:24:18,916
sure that we are aware of is that we fully understand how those tools can be levered and

1049
01:24:18,916 --> 01:24:23,636
all the counterbalances that exist with those tools. So this is all a fantastic conversation

1050
01:24:23,636 --> 01:24:29,016
in my view, though. Yeah. And my thesis has always been basically what Saylor said about,

1051
01:24:29,156 --> 01:24:33,396
I think it was from the mobile wave. He said, you invest in something when it's disrupting

1052
01:24:33,396 --> 01:24:38,736
and it's the clear winner. So when Netflix put Blockbuster out of business, when Apple came out

1053
01:24:38,736 --> 01:24:45,016
with the iPhone and put Blackberry and all of those companies out of business. And so with the

1054
01:24:45,016 --> 01:24:52,476
prefers replacing the convertible bonds and with stride giving that extra lever for the bear market

1055
01:24:52,476 --> 01:24:59,856
i've never been more bullish so that's that's you know my thesis really hasn't changed and it's

1056
01:24:59,856 --> 01:25:04,056
really only gotten better right so i'll chime in here with something we can move on to the next

1057
01:25:04,056 --> 01:25:10,756
topic so a year ago at it was back then it was micro strategy world in las vegas i went over to

1058
01:25:10,756 --> 01:25:17,176
talked to Saylor the first time I met him. And I said, I have a question about Andrew Ross Sorkin

1059
01:25:17,176 --> 01:25:24,316
and various other people that interview you on TV. And I said to him, I said,

1060
01:25:24,756 --> 01:25:29,316
do these people get it or don't get it? He goes, yeah, they get it. They actually do get it.

1061
01:25:29,716 --> 01:25:34,976
But they can't have me on TV saying, Andrew Ross Sorkin can't be on TV. Hey, I think Bitcoin is

1062
01:25:34,976 --> 01:25:37,956
great. Michael, tell us about your Bitcoin position. Yeah, we think it's all great.

1063
01:25:37,956 --> 01:25:43,596
They have to play the devil's advocate. Michael, tell us why you bought Bitcoin. Tell us why this

1064
01:25:43,596 --> 01:25:48,356
is good. Tell us why it's going up. Oh, really? It works like this. You're using converts. Why

1065
01:25:48,356 --> 01:25:54,556
does converts work? And so what happens is, is that gives some form of controversy, whatever

1066
01:25:54,556 --> 01:25:59,416
you want to call it, contrived or that comes out. It comes across that he has to defend his position

1067
01:25:59,416 --> 01:26:04,256
and makes for good television. Okay. So on this call, what we're talking about over here is I let

1068
01:26:04,256 --> 01:26:09,036
you guys talk for an hour. And then I chimed in and I said, look, the number's got to go up.

1069
01:26:09,256 --> 01:26:13,496
It's that simple. And my belief is this. And I think we all agree the number's got to go up.

1070
01:26:13,496 --> 01:26:20,556
And Mason, like I said back to you, if we were in a bear market, if it was 2023, right,

1071
01:26:20,956 --> 01:26:25,336
we don't know who the president's going to be. Or 2022, after he got through the crap

1072
01:26:25,336 --> 01:26:30,416
that happened with FTX and all the other crap with SBF and Terra Luna and all that blow up

1073
01:26:30,416 --> 01:26:36,176
crap that happened. So 2022 was miserable. 2023, nobody really wanted to buy it when I did.

1074
01:26:36,816 --> 01:26:41,996
And then it goes up. And then 2024, we have an awesome year. We get to go thinking about the

1075
01:26:41,996 --> 01:26:46,696
president, doing the Spock Bitcoin ETFs. Everybody knows the history. On January 11th, we get all

1076
01:26:46,696 --> 01:26:52,736
these tailwinds. We get a double top in 2024, which is all great. And now we're in 2025,

1077
01:26:53,076 --> 01:27:00,056
which tends to be, like I said, 2017, 2021, and 2025, the year after the halving. Now we want

1078
01:27:00,056 --> 01:27:04,416
the price to continue to go up because it should be a bull market. And we're very close on the S&P

1079
01:27:04,416 --> 01:27:11,576
500. So from that perspective, you're right. I am not patient in this particular year. In 2026,

1080
01:27:12,056 --> 01:27:18,096
2027, I'll be patient, but I'm not going to be arguing about whether or not MSTR is great.

1081
01:27:18,336 --> 01:27:22,576
I'm just not going to be here. I'll be chilling somewhere else. And then I'll come back in during

1082
01:27:22,576 --> 01:27:27,256
the next cycle, whenever that might be. And if the price continues to go up, then so be it. Then

1083
01:27:27,256 --> 01:27:32,456
will be great but as of right now i want to make enough money in 2025 that i don't have to worry

1084
01:27:32,456 --> 01:27:36,456
about 2020 well i don't really need to worry about any of the years going forward but from that

1085
01:27:36,456 --> 01:27:43,656
perspective i want to make enough in 2025 to make 2026 and later more comfortable well i think yeah

1086
01:27:43,656 --> 01:27:49,976
everyone is excited to do that with you gran with that's it can we talk about prog can we talk about

1087
01:27:49,976 --> 01:27:55,416
frog yes that's that's that was our next um that's our next topic so we're finally getting to the

1088
01:27:55,416 --> 01:28:01,236
the second topic I think on the agenda second topic and I'll just tell us on

1089
01:28:01,236 --> 01:28:08,256
track what are you doing yeah yeah Prague I got there a day earlier than Dan the

1090
01:28:08,256 --> 01:28:13,416
city is gorgeous they vacuum the streets at nighttime they pressure wash it the

1091
01:28:13,416 --> 01:28:18,696
streets are beautiful the city is gorgeous the food was great relatively

1092
01:28:18,696 --> 01:28:23,776
inexpensive because they're on they're on Czech Krona they're not even on the

1093
01:28:23,776 --> 01:28:30,696
euro. Okay. So from there, the prices were reasonable and the shops were great. Everything

1094
01:28:30,696 --> 01:28:36,056
was awesome. We saw the, I posted pictures. It was awesome. So what about Bitcoin? Went to the

1095
01:28:36,056 --> 01:28:40,476
conference there. They're hardcore Bitcoin people that are there in Europe. And especially the ones

1096
01:28:40,476 --> 01:28:45,556
that went to this conference. The leadoff presenter said, hey, everybody's here for number go up,

1097
01:28:45,576 --> 01:28:50,696
but we all know this. Great. Now let's talk about Bitcoin core code. That was the leadoff

1098
01:28:50,696 --> 01:28:55,656
presentation on Thursday morning. And for the whole morning, they went through, yeah, they talked

1099
01:28:55,656 --> 01:29:00,776
about the Lightning Network and wallets and how do you build applications on top of it, almost

1100
01:29:00,776 --> 01:29:06,676
whatever, I'm making up the percentage. 50% of the presenters, sorry, the exhibitors in the exhibit

1101
01:29:06,676 --> 01:29:17,376
hall were made up of Bitcoin mining companies, Bitcoin ASICs, rigs, cooling systems, equipment,

1102
01:29:17,376 --> 01:29:22,096
anything around that. I would say 50% of the exhibitors were based upon that.

1103
01:29:22,796 --> 01:29:27,136
There was a t-shirt. You could buy a Bitcoin t-shirt, but you can only buy it with a Bitcoin

1104
01:29:27,136 --> 01:29:31,476
lightning wallet, which I did not have set up. To be honest with you, that was pretty clunky to get

1105
01:29:31,476 --> 01:29:35,296
that set up. So I did not get a t-shirt paid with Bitcoin. I could have paid in Bitcoin,

1106
01:29:35,296 --> 01:29:39,656
but I couldn't do it because I didn't have a lightning wallet set up. So they were really

1107
01:29:39,656 --> 01:29:43,356
hardcore. You could pay for all the food in Bitcoin. And it was announced, I did a review

1108
01:29:43,356 --> 01:29:51,316
last night, you can see my space, 500,000 euros were transacted through Bitcoin to buy various

1109
01:29:51,316 --> 01:29:58,356
things at the show, whether to buy the tickets, to buy the food, to buy tchotchkes or t-shirts,

1110
01:29:58,476 --> 01:30:04,376
all that stuff, approximately 500,000 euros worth of Bitcoin were used. So they believe in Bitcoin

1111
01:30:04,376 --> 01:30:09,716
as a currency over there and they believe on using it. Okay. And the Bitcoin treasury companies,

1112
01:30:09,716 --> 01:30:15,476
I don't have a Bitcoin lightning wallet. Yes, that's true. Then the next day,

1113
01:30:15,716 --> 01:30:19,076
people talked about it. Sailor talked. There was a Bitcoin for Corporation event,

1114
01:30:19,536 --> 01:30:24,796
invite only. So even though I had an enterprise ticket, which was the middle ticket, not the whale

1115
01:30:24,796 --> 01:30:31,536
ticket, we had to get in to go to that event, which was invite only, but no cost to go in.

1116
01:30:32,136 --> 01:30:38,296
And Dan was there with us. We met with various other investment bankers. And I will not reveal

1117
01:30:38,296 --> 01:30:45,376
the names, but we were offered different positions in pre-IPO, different Bitcoin treasury companies,

1118
01:30:45,456 --> 01:30:51,056
let's just say it. And those are quite interesting. I have done private placements. I'm an accredited

1119
01:30:51,056 --> 01:30:59,536
investor. PE, private equity is really not my thing. I prefer to get in and get out. I don't

1120
01:30:59,536 --> 01:31:03,416
like some of the lockup periods. There's lots of, you have to read a lot of these different

1121
01:31:03,416 --> 01:31:08,236
prospectuses to do that. So we were offered that. It's not particularly something that I do.

1122
01:31:08,296 --> 01:31:37,936
Dan was there. What else could I say? The Bitcoin treasury, there was no room there when Saylor was talking. The room was completely full. We talked to a lot of the CEOs of the current Bitcoin treasury companies multiple times, major crypto Twitter or Bitcoin influencers, 100,000, 400,000, 500,000, a million followers. We talked to a whole bunch of those people. We talked to OGs and that's where we were. So Dan, you chime in. What was the Bitcoin investor day like?

1123
01:31:38,296 --> 01:31:45,436
It was good. It was really good. Definitely lots of insights we heard about what's kind

1124
01:31:45,436 --> 01:31:52,216
of going on in the Bitcoin space. But I do have to give Adrian credit, and he's been

1125
01:31:52,216 --> 01:31:57,756
doing a lot with these different Bitcoin treasury plays. So I think we spent a lot of time with

1126
01:31:57,756 --> 01:32:01,496
the AltBG guy. I don't know if you talked to him at all, Adrian.

1127
01:32:02,216 --> 01:32:04,316
I've talked to him for a little bit, yeah.

1128
01:32:04,316 --> 01:32:09,056
yeah yeah so it seems interesting I mean I think the most interesting product obviously they're the

1129
01:32:09,056 --> 01:32:16,376
only crew doing um doing the Bitcoin denominated converts what's your take on that Adrian so I

1130
01:32:16,376 --> 01:32:20,276
have to be fully transparent I haven't looked into it greatly um so I have I don't have a

1131
01:32:20,276 --> 01:32:29,336
a fully fleshed out view on it do I think it's a novel approach because I believe so I believe that

1132
01:32:29,336 --> 01:32:37,496
they are attempting to do the the um converse in the eurozone and there's some different dynamics

1133
01:32:37,496 --> 01:32:42,136
that i'm still trying to wrap my head around and how they're going to execute it but if it works

1134
01:32:42,136 --> 01:32:46,696
this comes back to what we were discussing before with adding leverage and what what is a true lbe

1135
01:32:46,696 --> 01:32:51,416
versus what is just like a bitcoin treasury company if they can execute it i think it makes

1136
01:32:52,616 --> 01:32:56,936
sense but i need to wrap my head around it because it's not as straightforward as the converse that

1137
01:32:56,936 --> 01:33:01,576
strategy is doing. Yeah, it's pretty interesting. They're injecting. So the company gets Bitcoin in,

1138
01:33:01,576 --> 01:33:06,776
they don't have to convert into Bitcoin with the fiat convert capital. They take on no term risk

1139
01:33:06,776 --> 01:33:12,616
essentially, right? With strategy, they're pledging a principal coupon payment on a specific

1140
01:33:12,616 --> 01:33:20,296
date in the future to their equity holders. Whereas the AltBG is pledging essentially Bitcoin

1141
01:33:20,296 --> 01:33:23,896
back to their shareholders. So what do share, sorry, not shareholders, they're convertible

1142
01:33:23,896 --> 01:33:29,096
note holders what convertible note what's the bond profile for the convertible holder right they have

1143
01:33:29,096 --> 01:33:35,096
bitcoin downside with equity like upside um and what is the risk for those holders well in the

1144
01:33:35,096 --> 01:33:40,856
case of strategy right you have that that bond floor the principal return to you at a certain

1145
01:33:40,856 --> 01:33:46,136
point in time so that's your floor and your upside is the equity here your downside is bitcoin your

1146
01:33:46,136 --> 01:33:51,896
upside is the equity the risk you're taking on is that bitcoin outperforms the equity so there's a

1147
01:33:51,896 --> 01:33:59,576
There's a real scenario in which Bitcoin outperforms Alt-BG spot shares via maybe too much common stock dilution.

1148
01:33:59,576 --> 01:34:14,192
And what you get is you underperform the Bitcoin you initially were holding So that the risk you take on however for altbg it a fantastic deal because again they don have any sort of liquidation risk when it

1149
01:34:14,192 --> 01:34:19,312
comes to their to their bitcoin so it's another way of doing it and clearly it's been working for

1150
01:34:19,312 --> 01:34:30,592
them i think anything yeah so yeah i'll pass this one over to you grain i mean we heard a lot about

1151
01:34:30,592 --> 01:34:37,392
the equity to equity market dynamics in england in the uk and that was an interesting conversation

1152
01:34:37,392 --> 01:34:41,872
we had with james van stratton um regarding you know kind of how people are thinking about

1153
01:34:41,872 --> 01:34:47,712
leverage bitcoin equities why people are buying um companies like coincilium with so much fervor

1154
01:34:47,712 --> 01:34:53,712
and what sort of the exposure um people have to bitcoin related products is in the uk

1155
01:34:54,832 --> 01:34:58,832
yeah and so so let me let me say why i made the face so um

1156
01:35:00,592 --> 01:35:24,872
Look, you get your news from wherever. And I thought in Europe, there's a lot of rich people. And I thought that Europe was, I thought Germany was a powerhouse worldwide. And this is where I'm going to get very quickly to what Dan just said about the UK market. It was brought to my attention. We were there and Tad was there. And Tad just said to me, I said, well, there's a lot of rich people here. And he's like, no, you're not getting it. I'm like, what don't I get?

1157
01:35:24,872 --> 01:35:50,212
If Germany in per capita GDP was compared against U.S. states, where do you think it would rank? And I'm like, I don't know, probably top 25%. And the math is Germany's per capita GDP is $55,400. It would be the 46th state in America, which means it would be below Kentucky, but above Alabama.

1158
01:35:50,212 --> 01:35:56,592
And then you get the UK would be ranked the 49th state in America in per capita GDP.

1159
01:35:57,212 --> 01:36:01,792
So when I went to Prague, what I realized was there's a lot of beautiful people there that work there.

1160
01:36:01,852 --> 01:36:04,532
There's a lot of tourists that were there. The city was gorgeous.

1161
01:36:04,832 --> 01:36:08,712
The people were dressed phenomenally well. And there's a lot of beautiful cars that were there.

1162
01:36:09,112 --> 01:36:14,672
But then when you look at the GDP per countries, they're in terrible shape.

1163
01:36:14,672 --> 01:36:26,212
I mean, if you're down by Alabama and Arkansas, and I'm sorry for the people that live in those states, but it's just a ranking, that if you're below Mississippi, not good, right?

1164
01:36:26,412 --> 01:36:28,892
And so when I'm talking about this, then we talked to James.

1165
01:36:29,212 --> 01:36:35,072
What he basically said was, is that a lot of people in the UK don't even have brokerage accounts.

1166
01:36:35,312 --> 01:36:43,492
They have pension accounts and they don't have brokerage, even though these are available for them, tax-advantaged accounts, that they don't even have them at all.

1167
01:36:43,492 --> 01:36:49,032
They're basically real estate people. And so what happened is, is that when in the UK,

1168
01:36:49,412 --> 01:36:55,152
you have a SIP and ISA accounts, and I'm not an expert in this, but what I can tell you is that

1169
01:36:55,152 --> 01:37:01,552
the people there, they are at least five to seven years behind the US. So everybody that's in the

1170
01:37:01,552 --> 01:37:06,572
US, you've already won. The fact that you're on this call listening for an hour and 39 minutes

1171
01:37:06,572 --> 01:37:11,672
means you've already won. If you've been in MSTR for more than a year, you've already won. Take

1172
01:37:11,672 --> 01:37:16,472
your victory lap, right? You're so far ahead of the rest of the world, specifically Europe,

1173
01:37:16,692 --> 01:37:22,212
there's no comparison. And the reason why MetaPlanet shot up is because of the NISA account

1174
01:37:22,212 --> 01:37:29,592
that's in Japan allowed them to easily buy the stock in their retirement account. And then it

1175
01:37:29,592 --> 01:37:34,992
basically it trades tax deferred. So you take it out. Any country that has that and there are

1176
01:37:34,992 --> 01:37:39,072
people that live there that do this have this massive advantage, but they have to do

1177
01:37:39,072 --> 01:37:44,412
an educational background to explain to people that you can actually make money in stocks.

1178
01:37:44,552 --> 01:37:48,452
But the only stock that people are getting excited about, and maybe that's hyperbole,

1179
01:37:48,592 --> 01:37:53,952
are the Bitcoin treasury companies because the returns are so great. So if I put in 5,000

1180
01:37:53,952 --> 01:37:59,732
euros into it or pounds or whatever's available in that local currency, you do that and it does

1181
01:37:59,732 --> 01:38:06,272
a 5x or a 10x, it changes your life. Totally does. Just like what happened to me in 2017.

1182
01:38:06,272 --> 01:38:11,452
team. So that's the difference. And so when we had these conversations of what's going on in Europe,

1183
01:38:11,772 --> 01:38:17,412
I completely, I was wrong. I did not understand where Europe was in relationship. I think Germany

1184
01:38:17,412 --> 01:38:22,832
is great. They make awesome cars. But then when I found out about their GDP, shocker to me,

1185
01:38:23,292 --> 01:38:29,752
I did not know this. And when I heard that, I was like blown away. And that altered my perception of

1186
01:38:29,752 --> 01:38:33,092
where we are in America. So everybody that's listening on this call, you've already won.

1187
01:38:33,092 --> 01:38:37,652
whether you agree with me, don't agree with me, hate me, like me, whatever it is,

1188
01:38:38,052 --> 01:38:41,892
the fact that you're on this call and you know this information that we're talking about

1189
01:38:41,892 --> 01:38:44,692
compared to Europe, you're five years ahead of them.

1190
01:38:45,212 --> 01:38:48,712
And in Bitcoin terms, comparing that to the real people,

1191
01:38:49,012 --> 01:38:51,012
you're 20 years ahead of everybody else.

1192
01:38:51,812 --> 01:38:53,972
And if you have more, I'm just making a number of,

1193
01:38:54,192 --> 01:38:57,612
if more than 25% of your net worth is in Bitcoin,

1194
01:38:58,052 --> 01:39:00,852
Bitcoin treasury companies and so forth and derivatives,

1195
01:39:01,432 --> 01:39:03,752
iBit, Misty, whatever, you already won.

1196
01:39:04,672 --> 01:39:07,512
Compared to the rest of the world, you've already won.

1197
01:39:08,272 --> 01:39:09,352
You're that far ahead.

1198
01:39:10,092 --> 01:39:12,512
So I think that's where we are.

1199
01:39:12,672 --> 01:39:13,932
And when I heard this information,

1200
01:39:14,532 --> 01:39:17,392
and it's very different when you go talk to people in person.

1201
01:39:17,732 --> 01:39:18,932
You're listening on a call.

1202
01:39:19,252 --> 01:39:20,752
And that's why I like spaces,

1203
01:39:20,752 --> 01:39:22,492
because I could take questions verbally,

1204
01:39:22,812 --> 01:39:24,252
hear that other person talk.

1205
01:39:25,012 --> 01:39:28,572
But when you go, I recommend that everybody goes to a Bitcoin event,

1206
01:39:29,372 --> 01:39:30,392
talk in person.

1207
01:39:30,852 --> 01:39:40,412
And if you can present your case in less than 60 seconds to meet somebody and say something really smart and intelligent, you'll probably learn a lot more than you will on any space.

1208
01:39:41,092 --> 01:39:43,692
And with that, I mean, I thought Prague was awesome.

1209
01:39:44,052 --> 01:39:45,632
I would love to go back again.

1210
01:39:47,952 --> 01:39:49,672
Yeah, I had tons of FOMO.

1211
01:39:49,672 --> 01:39:55,652
As soon as I saw everybody saying they were headed to Prague, I was like, I need to be there.

1212
01:39:55,992 --> 01:39:57,412
But there's always next year.

1213
01:39:57,512 --> 01:39:59,632
Hundreds of people watch dance shows.

1214
01:39:59,732 --> 01:40:00,792
I'm like, you have to see the clock.

1215
01:40:00,852 --> 01:40:04,032
the astrological clock that's 600 years old, right?

1216
01:40:04,072 --> 01:40:06,432
And the thing runs and it's exactly right on time

1217
01:40:06,432 --> 01:40:08,612
and has this cute little thing

1218
01:40:08,612 --> 01:40:10,072
that it does on the top of the hour.

1219
01:40:10,252 --> 01:40:12,152
The important part is there's 400 people

1220
01:40:12,152 --> 01:40:15,192
standing there watching this for 30 seconds

1221
01:40:15,192 --> 01:40:17,412
and then it's done and it's just awesome.

1222
01:40:17,992 --> 01:40:19,972
And so anyway, with that said, Prague was great.

1223
01:40:20,352 --> 01:40:21,652
We went to a bunch of parties.

1224
01:40:21,912 --> 01:40:24,512
People saw we were out at the four o'clock in the morning.

1225
01:40:24,512 --> 01:40:27,092
I mean, and I felt safe.

1226
01:40:27,232 --> 01:40:28,072
I walked home.

1227
01:40:28,272 --> 01:40:29,252
I did not take an Uber.

1228
01:40:29,252 --> 01:40:33,472
I walked home at four o'clock in the morning and they're vacuuming. I swear to God,

1229
01:40:33,632 --> 01:40:38,212
they're vacuuming and pressure washing the sidewalk. It couldn't get any cleaner. Oh,

1230
01:40:38,272 --> 01:40:43,832
and homeless people, no homeless people. I saw three beggars or four beggars in all of where I

1231
01:40:43,832 --> 01:40:48,672
walked around Prague and I was walking 20,000 steps a day. I saw four people begging for money.

1232
01:40:49,012 --> 01:40:53,812
That was it. And not a single homeless person. Now there's got to be homeless people in Europe.

1233
01:40:54,772 --> 01:41:00,292
they just put them someplace i don't hopefully that doesn't sound bad but it felt a one-way

1234
01:41:00,292 --> 01:41:04,612
ticket out of prague yeah it just felt great to walk around the city and then we went to this

1235
01:41:04,612 --> 01:41:09,892
great event the events were great there was lots of americans there the bitcoin treasury companies

1236
01:41:09,892 --> 01:41:17,092
and that conversation was a separate group that was 250 people maybe it was viewed as a curiosity

1237
01:41:18,932 --> 01:41:23,332
it was not viewed as mainstream don't anybody think that this is me sailors got four million

1238
01:41:23,332 --> 01:41:30,312
followers, we go to Europe, I would bet his followers are one-tenth of one percent European.

1239
01:41:30,652 --> 01:41:33,932
I'd love to see the geographical makeup on it.

1240
01:41:35,832 --> 01:41:37,652
Was it more Bitcoin only than Vegas?

1241
01:41:38,432 --> 01:41:39,692
I was kind of guessing it would be.

1242
01:41:39,932 --> 01:41:40,452
Bitcoin only.

1243
01:41:41,672 --> 01:41:41,912
Yeah.

1244
01:41:42,352 --> 01:41:43,012
Very much so.

1245
01:41:43,532 --> 01:41:43,752
Yeah.

1246
01:41:43,832 --> 01:41:44,672
And they talked about it.

1247
01:41:44,972 --> 01:41:45,172
Right.

1248
01:41:45,172 --> 01:41:46,632
So that was a great event.

1249
01:41:46,932 --> 01:41:48,672
I believe there'll be one in the fall.

1250
01:41:49,272 --> 01:41:51,592
I mean, flying, there's a bunch of money and doing that.

1251
01:41:51,592 --> 01:41:56,412
But the takeaway is it was a great experience.

1252
01:41:56,972 --> 01:41:58,412
Dan was a great traveling partner.

1253
01:41:58,592 --> 01:42:00,252
I was there with my buddy, Plank.

1254
01:42:00,852 --> 01:42:06,452
And so we talked, the people that we were surrounded by, Dan, how many investment bank,

1255
01:42:06,552 --> 01:42:11,232
how many people that, two people talking to us about particular deals.

1256
01:42:11,612 --> 01:42:16,772
And then we went to a bunch of places with two ex-investment bankers with us.

1257
01:42:17,992 --> 01:42:19,452
So it was the best of both worlds.

1258
01:42:19,452 --> 01:42:24,472
It explains, we'd hear something and then we'd ask them, great, can you tell us how this actually works?

1259
01:42:24,552 --> 01:42:26,952
And it was like, it was literally like Latin.

1260
01:42:27,172 --> 01:42:28,612
I'm like, that's how it works?

1261
01:42:28,792 --> 01:42:33,732
I have to go think about this because I'm more of a stock investor.

1262
01:42:34,292 --> 01:42:35,672
I'm not a private equity guy.

1263
01:42:36,532 --> 01:42:37,552
Is that fair, Dan?

1264
01:42:39,112 --> 01:42:39,832
That's fair.

1265
01:42:39,912 --> 01:42:48,032
And I think one thing I heard to reinforce a lot of people's bullish sentiment was there are a lot of people that are excited about a lot of different companies.

1266
01:42:48,032 --> 01:42:55,072
But one thing I did hear a lot about was I have an MSTR core position and I'm not selling it to buy these other LBEs.

1267
01:42:55,112 --> 01:42:57,732
I'm adding to my stack with the different LBEs.

1268
01:42:57,792 --> 01:43:00,212
So a lot of people are excited about all the Bitcoin equities.

1269
01:43:00,352 --> 01:43:02,692
And that's something a lot of people aren't thinking.

1270
01:43:02,812 --> 01:43:04,352
You can be excited about all of them.

1271
01:43:04,532 --> 01:43:05,792
So that was really cool to hear.

1272
01:43:05,792 --> 01:43:06,072
You can.

1273
01:43:06,212 --> 01:43:08,792
And I want to go back and say something that's really important here.

1274
01:43:09,432 --> 01:43:17,752
Because of my age, I have a large IRA account, whether it's a Roth IRA or regular IRA, I have both.

1275
01:43:18,032 --> 01:43:20,892
And so, and there's a weird way I was able to do the Roth IRA.

1276
01:43:21,032 --> 01:43:22,912
I did not do it as a backdoor Roth contribution.

1277
01:43:23,452 --> 01:43:28,072
But the important thing to understand there is that even though I own MSTR in both, and

1278
01:43:28,072 --> 01:43:32,932
the MSTR position was way bigger in my IRA account, I could sell that without triggering

1279
01:43:32,932 --> 01:43:34,152
any taxable events.

1280
01:43:34,572 --> 01:43:37,272
In effect, it's like living in Dubai, right?

1281
01:43:37,372 --> 01:43:42,832
Or Puerto Rico, even though I don't live there, to sell that and go chase other higher volatility

1282
01:43:42,832 --> 01:43:43,452
things.

1283
01:43:43,452 --> 01:43:47,392
But in the straight brokerage account where that would trigger taxable events, I have

1284
01:43:47,392 --> 01:43:53,552
a large core position at MSDR, which I'm going to keep and I'm going to sell that as time goes by.

1285
01:43:54,032 --> 01:43:59,352
So again, I'm the same person, but on the same equity, I have two different views of how I

1286
01:43:59,352 --> 01:44:05,792
invest in it or trade in it based upon the type of account that it's in. And so any country that

1287
01:44:05,792 --> 01:44:12,292
gives that choice to people, those countries win. Any country that does not do this loses.

1288
01:44:12,292 --> 01:44:14,612
and you can't buy.

1289
01:44:14,652 --> 01:44:15,792
Oh, the other crazy part was

1290
01:44:15,792 --> 01:44:20,852
it's incredibly difficult to buy Bitcoin in UK, right?

1291
01:44:20,872 --> 01:44:22,572
When we heard that, Dan, I was like,

1292
01:44:22,652 --> 01:44:24,472
what do you mean it's difficult to buy Bitcoin?

1293
01:44:24,812 --> 01:44:26,052
They're like, well, don't you understand

1294
01:44:26,052 --> 01:44:27,152
about what we just said?

1295
01:44:27,512 --> 01:44:28,732
I'm like, I don't get it.

1296
01:44:28,832 --> 01:44:30,752
You would ACH the money or wire the money

1297
01:44:30,752 --> 01:44:33,572
to a Bitcoin exchange, buy the Bitcoin

1298
01:44:33,572 --> 01:44:35,132
and put it into a hardware wallet.

1299
01:44:35,992 --> 01:44:37,832
They're like, no, that's really hard to do.

1300
01:44:38,932 --> 01:44:41,012
You could do that in America for the past,

1301
01:44:41,132 --> 01:44:42,272
whatever, 13 years.

1302
01:44:42,292 --> 01:44:50,012
so that's just straight bitcoin so i i can't i i did not realize it was like that in europe

1303
01:44:50,012 --> 01:44:55,552
and i don't know about all of europe but where i was there so anyway i hope that's a good feedback

1304
01:44:55,552 --> 01:45:01,872
for the people that are going on what we saw so it was it was a great a great trip um

1305
01:45:01,872 --> 01:45:11,812
mason you doing all right buddy yeah do we have any more um analysis

1306
01:45:11,812 --> 01:45:13,932
no more analysis

1307
01:45:13,932 --> 01:45:15,732
I'm dropping off

1308
01:45:15,732 --> 01:45:16,452
you guys are great

1309
01:45:16,452 --> 01:45:17,292
take care

1310
01:45:17,292 --> 01:45:20,492
we're almost at the 2 hour and 50 minute mark

1311
01:45:20,492 --> 01:45:21,672
you guys are great

1312
01:45:21,672 --> 01:45:23,312
I like being

1313
01:45:23,312 --> 01:45:24,772
if I have to be the devil's advocate

1314
01:45:24,772 --> 01:45:25,652
that's fine

1315
01:45:25,652 --> 01:45:28,392
make this a little bit exciting

1316
01:45:28,392 --> 01:45:30,632
nobody wants to show

1317
01:45:30,632 --> 01:45:31,772
that's all great

1318
01:45:31,772 --> 01:45:32,432
let's go home

1319
01:45:32,432 --> 01:45:33,692
drink a bunch of beers

1320
01:45:33,692 --> 01:45:34,572
that'd be pretty boring

1321
01:45:34,572 --> 01:45:36,272
so we have to make it a little bit lively

1322
01:45:36,272 --> 01:45:37,092
every once in a while

1323
01:45:37,092 --> 01:45:39,512
oh yeah

1324
01:45:39,512 --> 01:45:40,552
the beers are going to get drank

1325
01:45:40,552 --> 01:45:44,552
you guys are gonna take care guys have a good night bye thanks green later thanks all right

1326
01:45:45,512 --> 01:45:53,112
yeah it's you know it's 11 48 so we can probably just take a look at the um the s p 500 uh

1327
01:45:54,152 --> 01:46:01,112
spreadsheet real quick and then we can do numbers exactly so that and we can look at the mstri the

1328
01:46:01,112 --> 01:46:06,792
chart the the all important chart to close out the night and ms and mason can do you have that one

1329
01:46:06,792 --> 01:46:14,552
it's my favorite show okay cool so uh bitcoin price today when i when i looked was 107

1330
01:46:15,672 --> 01:46:25,512
uh that leaves us with this hurdle to get through which is to erase the last four quarters of

1331
01:46:25,512 --> 01:46:34,792
negative eps we got to come up with five billion and at the current price we double that so we would

1332
01:46:34,792 --> 01:46:42,272
would have to drop to like below 96 to not, you know, trigger those qualifications for S&P 500.

1333
01:46:42,552 --> 01:46:50,432
And of course, there is still the committee hurdle to get through. But I think most of us

1334
01:46:50,432 --> 01:46:55,492
think that that's just an eventuality. They probably wouldn't be able to delay it by more

1335
01:46:55,492 --> 01:47:02,892
than one quarter. And the longer that they kick the can down the road, it just means that strategy

1336
01:47:02,892 --> 01:47:05,112
gets in at a higher rank.

1337
01:47:05,832 --> 01:47:08,132
So that's going to be another benefit

1338
01:47:08,132 --> 01:47:11,512
to the higher market cap and all the ATM selling.

1339
01:47:11,692 --> 01:47:13,172
That's probably an unintended consequence

1340
01:47:13,172 --> 01:47:14,812
that maybe some people didn't think about

1341
01:47:14,812 --> 01:47:17,612
is that giant market cap is just going to put them

1342
01:47:17,612 --> 01:47:20,172
so close to the top that the passive inflows

1343
01:47:20,172 --> 01:47:22,692
are going to be pretty nice.

1344
01:47:23,792 --> 01:47:25,472
Yeah, you got to see this round.

1345
01:47:26,152 --> 01:47:27,832
Like this is it.

1346
01:47:28,572 --> 01:47:29,632
We've been waiting for this part.

1347
01:47:29,632 --> 01:47:30,152
You should mute.

1348
01:47:31,692 --> 01:47:32,132
Okay.

1349
01:47:32,892 --> 01:47:33,892
Yeah, this is it.

1350
01:47:33,892 --> 01:47:38,892
This is part of the trade we've been waiting for.

1351
01:47:38,892 --> 01:47:42,652
I mean, it's going to be really, really exciting.

1352
01:47:42,652 --> 01:47:45,392
There's still a little bit of echo, guys.

1353
01:47:45,392 --> 01:47:58,468
All right So we do moon math real quick and then we just do final thoughts And I was going to try to pull an all but you guys are lightweights It fine

1354
01:48:00,868 --> 01:48:06,328
So the moon math with 592,000 Bitcoin, 107 price.

1355
01:48:08,948 --> 01:48:14,848
We've seen this chart before, and it just gets nuts based on different MNAVs.

1356
01:48:14,848 --> 01:48:25,028
But the one thing that I really think people should do, and I think this kind of solves the debate or any of the FUD that anybody wants to talk about, and it could be proof of reserves.

1357
01:48:25,028 --> 01:48:30,748
It could be whatever the hell is trending on Bitcoin Twitter.

1358
01:48:30,748 --> 01:48:39,108
and if your model is 150k Bitcoin with a Forex MNAV

1359
01:48:39,108 --> 01:48:44,208
and you think, okay, this other company has proof of reserves,

1360
01:48:44,508 --> 01:48:47,968
so I think we should ding strategy,

1361
01:48:48,748 --> 01:48:51,708
then put into your valuation model

1362
01:48:51,708 --> 01:48:56,628
what percent chance you think proof of reserves puts them at risk.

1363
01:48:56,888 --> 01:48:57,468
One percent?

1364
01:48:57,468 --> 01:49:07,728
So now you're going to change your valuation from 1109 to like 1098, right?

1365
01:49:08,048 --> 01:49:14,108
So that's really all you have to do is plug in your assumptions.

1366
01:49:14,108 --> 01:49:23,188
And if you want to take the valuation model and ding it by a few percent based on what you think that level of risk is, that's really all it is to it.

1367
01:49:23,188 --> 01:49:28,848
I don't think it's a binary thing where it's like, oh, if strategy doesn't do proof of reserves, I have to just exit the entire trade.

1368
01:49:29,348 --> 01:49:32,368
Just build your price targets and keep it moving.

1369
01:49:36,088 --> 01:49:36,488
Yeah.

1370
01:49:37,488 --> 01:49:43,668
Do you guys mind if I pull up the MSTRI bit here?

1371
01:49:44,028 --> 01:49:44,648
Yeah, go for it.

1372
01:49:45,368 --> 01:49:46,428
We're done with my charts.

1373
01:49:48,668 --> 01:49:50,148
Love your charts so as always.

1374
01:49:50,148 --> 01:49:56,268
actually while you're doing that this is actually jeff's spreadsheet and when he sent it to me

1375
01:49:56,268 --> 01:50:02,828
it was like a six-year-old walking into freaking disney for the first time i was like there's 75

1376
01:50:02,828 --> 01:50:08,628
tabs on this thing and i'm just like trying to reverse engineer all the calculations like

1377
01:50:08,628 --> 01:50:14,048
you know when a sucky car company orders a tesla just so that they can rip open to the hood

1378
01:50:14,048 --> 01:50:19,248
and like see how it works and figure out some real engineering is that's that's what i've been doing

1379
01:50:19,248 --> 01:50:25,888
so um yeah you're gonna sell it online for a profit yeah exactly yes i thought about it yeah

1380
01:50:25,888 --> 01:50:29,168
i thought about it i could just auction the spreadsheet off in the comments and

1381
01:50:29,168 --> 01:50:36,688
and just like never work again exactly retire again for real so like so sell subscriptions

1382
01:50:36,688 --> 01:50:43,568
and then buy bitcoin with it and then uh you'll have like a five m nav pretty soon you'll have a

1383
01:50:43,568 --> 01:50:51,088
five and if you buy mstr 1080s you could have a treasury company that competes with ours yeah

1384
01:50:51,088 --> 01:50:54,368
for real uh what's the m nav on this right buddy it's gotta be pretty big

1385
01:50:55,568 --> 01:51:01,808
because it's pretty high it's pretty high but don't dilute it so yeah um but okay this is mstr

1386
01:51:01,808 --> 01:51:08,528
ibit that for anyone who doesn't isn't familiar with this chart it is mstr price and ibit and uh

1387
01:51:08,528 --> 01:51:13,408
this is a weak attempt at the 200-day moving average in the teal line. It doesn't go all

1388
01:51:13,408 --> 01:51:18,528
the way back. So you can see we had nice movement upwards. We had that blow off top. I think people

1389
01:51:18,528 --> 01:51:24,208
have to stop thinking about when we opened on that one day at 530 as an actual price.

1390
01:51:24,208 --> 01:51:29,728
That was a five-second price and then it proceeded to fall 20% that day. So the way I think about it

1391
01:51:29,728 --> 01:51:37,008
is the real all-time high is around $420 a share. And we touched that and then we collapsed with

1392
01:51:37,008 --> 01:51:41,408
the chain of coming out and short reporting uh we fell down to the 200-day moving average which

1393
01:51:41,408 --> 01:51:47,088
we've been bouncing off in a very weird eerily fashion and sailor essentially shut off the atm

1394
01:51:47,088 --> 01:51:53,568
right at that bottom along the the 200-day moving average will that will we continue to trend up

1395
01:51:53,568 --> 01:51:57,808
and towards the right i mean so long as they continue yielding bitcoin per share uh so long

1396
01:51:57,808 --> 01:52:02,768
as the equity likes a one eight one seven one nine m nav i think this will continue up to the right

1397
01:52:02,768 --> 01:52:07,808
Are we in a horizontal channel above which we'll break out?

1398
01:52:08,288 --> 01:52:19,368
Josh has said that as the sell pressure in the common stock equity diminishes, we could see higher Ibit ratios exceeding seven, which is obviously something we're all looking for.

1399
01:52:19,368 --> 01:52:30,448
I think if we do hit an 8, 7, 8, 9 MSTRI bit ratio, that's synonymous to three, potentially, that's three plus MNAV.

1400
01:52:30,768 --> 01:52:33,528
We're at 150 Bitcoin and three MNAV.

1401
01:52:33,928 --> 01:52:35,688
You people will all be very wealthy.

1402
01:52:35,888 --> 01:52:39,348
So I think for all those reasons, things are looking really good moving forward.

1403
01:52:39,688 --> 01:52:40,708
And I'm on calls.

1404
01:52:41,908 --> 01:52:45,848
And setup's not bad, especially with the no ATM.

1405
01:52:45,988 --> 01:52:48,008
It's clearly had an impact on the stock.

1406
01:52:48,008 --> 01:52:51,388
And I was one, can we stop sharing this here?

1407
01:52:52,048 --> 01:52:58,288
I was one to say that the common stock equity doesn't matter for the price.

1408
01:52:58,408 --> 01:52:59,908
The ATM issuance doesn't matter for the price.

1409
01:53:00,428 --> 01:53:03,128
What I didn't understand, this is something Ben helped clarify for me,

1410
01:53:03,168 --> 01:53:09,388
is like, while the common stock ATM is only 2%, 1%, less than 1% of the total daily traded volume,

1411
01:53:09,988 --> 01:53:13,088
it's a narrative thing that drives the price down.

1412
01:53:13,168 --> 01:53:14,748
But not only does the narrative drive the price down,

1413
01:53:14,748 --> 01:53:16,768
but then people will come into the market, big players,

1414
01:53:16,768 --> 01:53:24,688
and what they do is they put pressure on the equity by shorting it with lots of money.

1415
01:53:25,208 --> 01:53:31,208
And it seems like it's a simulated sell pressure on the equity. And everyone says it's because of

1416
01:53:31,208 --> 01:53:35,488
the ATM, but it's not. And it's just down to pressure. So I think there's a lot of

1417
01:53:35,488 --> 01:53:41,388
smart participants shaking retail out, using the common stock equity as negative optics,

1418
01:53:41,388 --> 01:53:46,248
and then using billions and billions of dollars of short interest on the stock to keep the

1419
01:53:46,248 --> 01:53:51,788
pressure low. And so for all those reasons, I think it's cool that Saylor has taken his foot

1420
01:53:51,788 --> 01:53:57,308
off the common stock ATM and he's looking to drive that ATM higher. Clearly that's the signal

1421
01:53:57,308 --> 01:54:02,148
he's sending to the market. And even just a change, right? We needed a change. The MNAV was stuck very

1422
01:54:02,148 --> 01:54:08,148
low. And so any sort of change is exciting moving forward, especially with the big catalyst on the

1423
01:54:08,148 --> 01:54:15,928
horizon. Yeah, I'm loving no ATM uncommon. Yeah, I would have to agree. And if you

1424
01:54:15,928 --> 01:54:23,808
look at the MSTRI bit. I mean, right now we're in a consolidation phase, but it's a very volatile

1425
01:54:23,808 --> 01:54:31,868
chart. And you have to notice like the long-term pattern is we stair step up and then go sideways

1426
01:54:31,868 --> 01:54:41,488
for, you know, long, long periods of time, eight months, you know, at least. And that's an attempt

1427
01:54:41,488 --> 01:54:52,768
to to wear down patients make investors make retail uh sell shake them out and uh consolidate

1428
01:54:52,768 --> 01:55:03,488
and buy lower attempts from the market makers so um i'm i'm personally bullish i'm i'm also

1429
01:55:03,488 --> 01:55:11,488
long-term bullish i mean if you are looking at sailors figures for the the 21 million as i said

1430
01:55:11,488 --> 01:55:21,648
before that's a 12 trillion in 12.4 trillion in 20 years and that's that's 100x from here and

1431
01:55:21,648 --> 01:55:25,408
risk adjusted i don't think you're going to find anything better in the market

1432
01:55:27,168 --> 01:55:29,648
mason i'm going to be a billionaire before you mark my words

1433
01:55:29,648 --> 01:55:38,768
hey at that point i don't think the dollar will mean much so yeah yeah we're gonna play it's about

1434
01:55:38,768 --> 01:55:44,768
who has the most bitcoin and that's uh that's important to remember here if you're chasing fiat

1435
01:55:44,768 --> 01:55:53,728
you've already lost should we do final thoughts oh yeah go ahead dan let's do adrian first yeah adrian

1436
01:55:53,728 --> 01:56:07,248
first you're muted um yeah no final thoughts i think that i still think overall we're in a great

1437
01:56:07,248 --> 01:56:13,488
position i think that bitcoin is about is going to uh rip into the end of the year i think that

1438
01:56:13,488 --> 01:56:19,088
um strategy is going to do very very well at the end of the year but um i still think that with all

1439
01:56:19,088 --> 01:56:25,848
of these other companies that are coming out right now, it is good to make sure that we

1440
01:56:25,848 --> 01:56:32,548
don't get lost in all the chasing the rabbit. And even with that said, continue to test

1441
01:56:32,548 --> 01:56:39,268
your thesis when it comes to strategy. All things considered, if you look at where we

1442
01:56:39,268 --> 01:56:44,968
were two years ago and then where we were a year ago and where we are now, I think that

1443
01:56:44,968 --> 01:56:50,708
it's quite evident that the strategy, that strategy strategy is working. So there's no

1444
01:56:50,708 --> 01:56:56,108
reason not to be bullish, but bullish for perspective is always, is always good. So

1445
01:56:56,108 --> 01:57:03,188
we just have to sit on our hands and wait for the ride, man. So S&P 500 inclusion is likely coming.

1446
01:57:04,248 --> 01:57:09,468
Bitcoin is going to do what it's going to do. We're all going to make the gains. And then we're

1447
01:57:09,468 --> 01:57:13,528
just going to do it again. And then again, and then again, and then it's just a matter of how

1448
01:57:13,528 --> 01:57:19,288
many how much how much gains that you make in time and how long can you hold on to the ride and i think

1449
01:57:19,288 --> 01:57:25,288
that um i really think we're in for some fun in the next coming months and years and i'm excited

1450
01:57:25,288 --> 01:57:34,728
to be part of it right on go ahead dan great um i think it's easy to get frustrated about price

1451
01:57:34,728 --> 01:57:42,408
action and talk about price action as if it's a thing and unless you're a moment like we hear i

1452
01:57:42,408 --> 01:57:45,948
I entered strategy with a fundamental view on equity.

1453
01:57:45,948 --> 01:57:48,428
And that's the only way I've been able to make money in markets

1454
01:57:48,428 --> 01:57:50,328
is by having a fundamental view

1455
01:57:50,328 --> 01:57:53,068
and creating, having a fundamental view

1456
01:57:53,068 --> 01:57:54,628
and then positioning in that direction.

1457
01:57:54,628 --> 01:57:55,748
So that's what we continue to do

1458
01:57:55,748 --> 01:57:57,988
is have a fundamental view and change our outlook

1459
01:57:57,988 --> 01:58:00,728
and update it on these leveraged Bitcoin equities.

1460
01:58:00,728 --> 01:58:05,268
So I think getting angry at prices or becoming frustrated

1461
01:58:05,268 --> 01:58:08,588
and then throwing your hands up is no way to invest

1462
01:58:08,588 --> 01:58:10,048
because it's very reactionary.

1463
01:58:10,048 --> 01:58:11,448
So we'd like to see where the ball's going

1464
01:58:11,448 --> 01:58:18,888
try to position in that way if bitcoin is still below its all-time high strategy is hovering above

1465
01:58:18,888 --> 01:58:25,368
its what i consider its real all-time high of 420. if bitcoin's at 450 and strategies m nav compresses

1466
01:58:25,368 --> 01:58:32,648
to one um i think there may be cause for concern uh until then uh i'll be long calls and i think

1467
01:58:32,648 --> 01:58:37,768
the common uh preferred equities sorry the preferred equities are undervalued um so it's

1468
01:58:37,768 --> 01:58:44,968
not i don't think it's time to lose your shirt oh yeah uh volatility is gift to the faithful

1469
01:58:45,528 --> 01:58:52,168
sarah says that right um the main goal right now should be accumulation accumulation of bitcoin

1470
01:58:52,168 --> 01:58:59,208
accumulation of strategy you know this at least this is my perspective and there are some exciting

1471
01:58:59,208 --> 01:59:07,368
companies that are up and coming and i'm looking into them and i think everyone should do their due

1472
01:59:07,368 --> 01:59:15,128
diligence it's going to get very loud i think bitcoin is um i feel like it's about to go higher

1473
01:59:15,128 --> 01:59:20,568
i think we can all kind of feel that and and maybe that's uh maybe that's an indication that's not

1474
01:59:21,368 --> 01:59:29,608
but um hold on to your shirt and uh make sure you're you're doing everything from a rational

1475
01:59:29,608 --> 01:59:35,928
position not driven by emotion not driven by fear and greed that's where i've gotten into the most

1476
01:59:35,928 --> 01:59:44,928
trouble in the past is by playing into my emotions and not going based off of what's rationally in

1477
01:59:44,928 --> 01:59:55,548
front of me oh yeah uh for me i think this this discussion while it seems like it's you know

1478
01:59:55,548 --> 02:00:01,368
maybe a little a lot of back and forth everything that this group is saying is intentional

1479
02:00:01,368 --> 02:00:08,708
like even down to the thumbnails that justin is creating like you know he's putting symbolism in

1480
02:00:08,708 --> 02:00:15,128
there and he's putting like the zombies from wall street and the little nods to texas getting the

1481
02:00:15,128 --> 02:00:21,348
treasury and you know all of that stuff and the reason why i used tsunami in the agenda for

1482
02:00:21,348 --> 02:00:28,568
this onslaught of bitcoin treasury companies and etfs popping up is that if you've ever seen the

1483
02:00:28,568 --> 02:00:35,608
videos of like a tsunami that's about to hit the the ocean actually gets sucked out into

1484
02:00:35,608 --> 02:00:40,528
like away from the beach and everyone's just standing around trying to figure out what's

1485
02:00:40,528 --> 02:00:45,608
happening and that just kind of feels like the way that ivy is being sucked out right now and

1486
02:00:45,608 --> 02:00:52,648
when you see that sign happen it's time to run away from the beach because the tsunami is coming

1487
02:00:52,648 --> 02:01:01,348
and so i think bitcoin's gonna rip uh ivy's gonna come back and it's gonna be a wild ride

1488
02:01:01,348 --> 02:01:07,148
so i think we're going higher that's for you just so late so we have to say i have to say

1489
02:01:07,148 --> 02:01:12,268
everything you've just watched none of this was financial advice although it may have been awesome

1490
02:01:12,268 --> 02:01:18,108
oh shit i forgot to do the tim video didn't i i just didn't know what i don't know yeah maybe

1491
02:01:18,108 --> 02:01:23,428
tonight we were giving financial advice yeah really some not financial advice advice thanks

1492
02:01:23,428 --> 02:01:28,148
mason thanks for keeping me honest man all right with that yeah i think we're going higher

1493
02:01:28,148 --> 02:01:32,808
and uh thanks for everybody tuning in see y'all