Ray Bop
1.6K posts
Ray Bop
@raybopbop
BS Math | MS Computational Finance | Former Varsity 🎾 @carnegiemellon | I always play E4 ♟️ | Researcher at Celeritas Management Group | BTC is Freedom
United States Katılım Ocak 2017
385 Takip Edilen138 Takipçiler
The more BTC ownership centralized, the more people will opt to use something else when solving their problems.
Michael Saylor@saylor
Strategy has acquired 1,587 BTC for $100 million to increase our $BTC Reserve to ₿846,842. We have also increased our USD Reserve by $100 million to $1.1 billion. $MSTR $STRC strategy.com/press/strategy…
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BPS measures Bitcoin per common share before senior claims. CEBE BPS measures Bitcoin per common share after senior claims. CEBE is the conservative risk metric. BPS is the common equity growth metric. BTC Yield measures BPS execution.
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$STRC buybacks are coming.
Raising dividends failed.
Semi-monthly dividends failed.
Saylor needs to start buying back STRC shares if we want this thing trading at par.
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@CalebFranzen The yield primarily only comes from the first one. The question is over what time frame must it appreciate. Aka how long of a bear market can MSTR survive. They can hibernate for a while
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Look, I'm not a super smart guy...
But I'm having a hard time with this.
$STRC pays an 11.5% dividend yield.
That yield, as far as I'm concerned, comes from:
• Bitcoin's appreciation
• The ability to issue $MSTR equity
• The ability to issue $STRC preferred equity
But $MSTR is sitting on an unrealized loss of ~$11Bn.
$MSTR stock is down -78.4% from its highs in Nov.'24, but it's also down -37.7% in the past 6 months and -70.3% in the past year.
In other words, the first two options are off the table.
Which only leaves the third option as viable...
But then the ability of the asset to pay an 11.5% yield is based on the ability to issue more of that same asset?
Explain this to me like I'm 8 years old.
Please.
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Not a good sign. The effect of this transaction was to reduce the holy metric: BTC per Share. $MSTR either assumes their common holders are too dumb to realize issuing common shares at current mNAV is dilutive; or they think surface optics are more important than math...or both.
Michael Saylor@saylor
Strategy has acquired 1,550 BTC for $101 million to increase our $BTC Reserve to ₿845,256. We have also increased our USD Reserve by $100 million to $1.0 billion. $MSTR $STRC strategy.com/press/strategy…
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Last year I stopped paying taxes from my paycheck and bought BTC instead.
In April I did my taxes; I paid nothing and waited for them to contact me back.
Today I received notice from IRS that I owe them. I was waiting for this. I am choosing to pay over 36 months instead, leaving the money invested in BTC the whole time. I owe $9,740 but since I am taking 3 years (36 monthly payments) to pay it back I will end up paying $10,915 instead. This equates to about 7.55% APR. I'm doing this because I believe BTC will average better than 7.55%.
If I had owed >$10k I would be able to pay it back over 6 years instead of 3 years. I'll fix that next year.
@sunny051488
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If company A and B have indentical balance sheets to Strategy but B has way higher cost basis than A, then B would be sitting on a much greater tax loss harvest potential. Though I am unsure how those capital losses can be put to use in the future besides for the case when they sell BTC at a capital gain.
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Let's debunk two common bear cases issues on MSTR that are irrelevant to the future of the company.
1. The past cost of purchases of BTC doesn't matter to the company at all. It matters somewhat to the shareholders but even that is mostly irrelevant to the companies future
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The bear case for $MSTR and $STRC 101
This bear case is meant to explain how MSTR as a company will struggle in a continued and sizeable drawdown BUT ALSO debunk some very common and faulty bear cases that float around the internet.
All bear cases depend on BTC going down.
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@Evan_ss6 @thedefivillain God forbid we add some slack into the constraints of this optimization problem. And god forbid we we update our philosophy given mathematical insights. Then it will all be ok.
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@thedefivillain market is freaking out less about the sells, more about how he's going from the biggest net buyer to not a buyer. that is a meaningful change no matter how you slice it
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What is most likely going to happen with $STRC:
- It's going to keep dumping with BTC until BTC finds a bottom, at which point it's going to bottom too. Maybe around $90, maybe here if BTC doesn't move further down (hmm)
- Once BTC bounces again, STRC will bounce too as people will play the "repeg trade".
- The dividend rate is likely to be increased, because the 30-day VWAP will probably be below $99.
- STRC might take some time to get back to par, but once BTC finds a bottom and people realize the dividend will get paid, it should have a magnet towards $100.
- If the mNAV remains below 1.22x, Strategy will have to sell either $MSTR shares or $BTC to fund the monthly dividend payments. They would sell BTC only if mNAV is below 1.22x. They have been selling MSTR shares every month since STRC inception to pay the dividends, so that's really nothing new (!)
- The current dividend burden is $1.7bn annually, corresponding to less than $150M a month. Let's say this goes to $200M a month in case they raise the dividend rate a lot. So this means that in the worst case scenario, we would have $200M sell pressure a month on BTC... which is a drop in the bucket.
The market is freaking out about a sub $200M monthly sell pressure, this looks like a wild overreaction to me. As a reference, the German government sold around $3bn worth of BTC in less than a month during the summer of 2024...
(That being said, the pronounced relative weakness of BTC relative to stocks is more concerning and makes the dip buying much less straightforward here)
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@JoshMandell6 What did Iranian Santa clause say to the rower?
Have a Maritime
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This is a 110 IQ take.
The 140 IQ take is that Saylor doesn’t own any bitcoin himself - it is owned by shareholders who have confidence in his ability to acquire more Bitcoin - and that is just corporate adoption of Bitcoin as savings tech, which is a prerequisite for hyperbitcoinization.
The 160 IQ take is that Saylor, by packaging Bitcoin into corporate securities with different risk profiles, has done more to democratize and distribute Bitcoin than any person since Satoshi himself. People who own $STRC are, without knowing it, using bitcoin:native to save, but at a risk profile that is acceptable to them.
Michael Saylor isn’t preventing anyone from owning bitcoin - and he, more than anyone, tells you to do so - but he is opening up Bitcoin to people and pools of capital that previously could not access it.
Steve Barbour@SGBarbour
Saylor can't sell a substantial portion of his bitcoin without tanking the price. Networks are meant to be distributed. Liquidity comes from distribution. Saylor has done nothing to promote distribution. Strategy is a shitcoin.
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Can someone please tell me, how do perpetual preferred stocks offering 11%-13% annualised dividends differ from the high-yield risk free DeFi products that later rugged users?
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@altols @HermesLux Feel like this makes sense though feel free to comment your thoughts
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Here is a simple counter
If you look at MSTR 600-700 call spreads they are trading around 2.50. This price (normalized by call spread width) should be bounded by the probability that MSTR expires above 600 and the probability MSTR expires above 700. Aka
P(MSTR>=700) <= 2.5% <= P(MSTR >= 600)
However by your assertion we can look at the delta of the 700 calls to see what is P(MSTR >= 700) and we therefore conclude this is around 21% (according to Robinhood). But this contradicts the market implied upper bound of 2.5%.
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I am all BTC, MSTR options, and Metaplanet. Very little anything else.
Steven Stasik@1thesteve
@HermesLux Any ideas about diversification with some SpaceX, Strive, Anthropic? Or you 🍊 all the way
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$MSTR mNAV will likely never go up to 3x+ again.
$ASST mNAV is more likely to go above 3x at some point during the next bull run.
Thus, ASST calls provide more convexity than MSTR calls.
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