There have been a couple of times this World Cup where I’ve thought I should watch soccer more.
This resulting in a 30-minute power play and Balogun’s ejection in the next (elimination) game made me remember why I don’t watch this sport.
@Gfilche@grok Download the app “NextSpaceflight” and you can have alerts for starship launches. The app gives you a ton of info
https://t.co/90dHqlciKZ
Right now there is a 52-year-old dude at your local VFW bar, wearing a faded Harley shirt, he has a $14.37 bar tab, and he's bitching about 'the system' while his knee replacement fails and his credit score laughs at 487.
Had he bought Bitcoin instead of Busch Light cases since 2017 he'd have generational wealth, a debt-free life, land for his kids, and the last laugh as the dollar dies.
Bitcoin is hope.
It's the only mathematical mercy left in this clown world.
FOCUS. STACK. WIN.
MSTR Reality Check
Emotions are running high!
People are getting manipulated by all of the engagement farming FUD and for some reason think Saylor and Strategy are on the brink of some death spiral.
As per usual, these people don't do math. They just post a red chart with a doomer sentence for clicks.
If I remember correctly, MSTR survived 2022. Actually, I don't have to remember, because I can buy the stock today.
Let us compare it to the absolute depth of the 2022 bear compared to today.
On November 21, 2022, Strategy had 130,000 BTC.
Their outstanding debt (senior claims) was equivalent to 146,735 Bitcoin.
Yes, the amount of Bitcoin that MSTR shareholders were economically exposed to was NEGATIVE. -16,735 Bitcoin.
The senior claims left zero residual for the common stock, and yet the stock never went to zero. On that same day, the stock closed at $15.72. The common equity bitcoin exposure NAV per share was -$2.33.
Today, they have 847,363 Bitcoin, with senior claims in Bitcoin at ~351,567 BTC.
Yes, in 2022 the common equity was exposed to -16,735 BTC and now it is exposed to 495,796 BTC.
2022 common equity sats/share: −14,786 sats/share
2026 common equity sats/share: 138,146 sats/share
2022 common equity NAV per share: -$2.33
2026 common equity NAV per share: +$81.69
Yes, right now the stock is trading at $87.64 vs the NAV per share of $81.69.
That means the true CEBE mNAV is 1.07x, a 7% premium to the residual left over after senior claims.
Strategy has a balance sheet built for war.
This is a cake walk compared to 2022.
STRC down to $82.6 today. Here's my read:
1. Strategy is fine. If everything stays as is, they can pay STRC dividends for 32 years. If BTC appreciates at ~2% CAGR, they can pay dividends indefinitely.
2. Why the sell-off? This appears to be a liquidation cascade.
Over the last 6 months, the narrative became that STRC volatility was reducing, and price began to spend all its time in $99-100 range.
This invites leverage. If you expect the price to always be north of $95, you can take on 20x leverage with your portfolio to buy more STRC and dramatically increase the yield on your portfolio.
This works great, until it doesn't.
STRC is designed as a free-market asset. When attention shifted to SATA and STRC price flagged, it may have raised the attention of opportunistic short-selling hedge funds.
By shorting aggressively, they could push the price down and start triggering margin calls and liquidations from folks who aggressively levered up their STRC positions.
The price action today is a clear liquidation cascade, rapidly pushing prices lower, in turn triggering additional liquidations.
3.
What happens now? The market will heal itself.
Opportunistic hedge funds will recognize that this is a firesale and the fundamentals are unchanged for STRC and step in as buyers. Shorts will close, becoming buyers. Individuals are getting a tremendous entry price for long-term holding STRC shares.
Buyers at this level will get ~13.7% effective yield. If STRC trades back to $100 and they sell, they get an easy +18% return.
4.
What will Strategy do?
Strategy will likely increase the dividend rate on June 30 - maybe to 11.75% but possibly to 12%. Buyers at the current price level then would get 14.2% effective yield from that point forward.
Strategy may also step in to buy STRC shares back. They could do this by issuing new shares of MSTR (currently at 1.14 mNAV) or by taking on traditional debt and deploying those funds to buy discounted STRC shares on the market.
If/when STRC trades back to $100, Strategy could then re-issue those STRC shares. The ~$15 delta per share could be used to buy BTC as pure accretion to MSTR holders, with no net change to amplification.
No doubt that Saylor has already at least considered this, and it wouldn't surprise me if they're currently doing this.
5.
In summary...
The market is freaked out that this depeg is like Terra/Luna... but this is not an asset like that. Strategy's balance sheet determines whether STRC continues to receive dividend payments... and Strategy's balance sheet is completely unchanged.
This is a leverage wipeout.
From this, the market will learn that Digital Credit is mostly very low volatility. But because it is a free market asset, the longer that a Digital Credit instrument trades within a tight range to par... the more leverage will inevitably pile up as people get greedy.
And that creates the conditions for a leverage wipeout depeg. Following that, the instrument will make its way back to par value as the market heals itself and recognizes that the dividend payments will continue uninterrupted because the issuer's balance sheet is unaffected.
Elon Musk is now worth $1.3 Trillion dollars and he's using it to build a sustainable economy in space. What a waste. If that money was given to the government instead, we could build 4.5 miles of high speed rail 20 years from now.
.@BernieSanders , it is a time to celebrate. @elonmusk has created enormous value for society by building @SpaceX, driving down the cost of rocket launches and creating a global satellite communication network that has brought high speed, low-cost internet and communication access to hundreds of millions and eventually billions of people along with critical advantages for our military and our nation’s defense.
SpaceX and its technologies will cause an acceleration in the growth of wages and wealth creation globally, including in some of the poorest communities in the U.S. and around the world.
Access to low-cost, high speed communications everywhere will allow children around the world to be educated, families to build businesses, and life-saving medical knowledge and care to be available everywhere.
SpaceX will materially bring down the cost of compute, advancing AI and humanity.
Meanwhile, 4,000 SpaceX employees yesterday became millionaires, including hourly wage employees who you claim you are trying to help.
The Elon Musks of the world drive growth, global GDP, and provide access to goods and services at lower cost that would otherwise not exist.
Elon’s nominal trillionaire status is due to his ownership of SpaceX, Tesla, Neuralink, the Boring Company and his other initiatives that have brought new technologies that improve our everyday lives.
Elon is not sitting on a trillion dollar pile of cash, jewelry and gold. He is using his controlling stakes in his companies to advance mankind. Elon’s companies don’t pay dividends. They reinvest all of their capital to accelerate innovation and value creation.
Elon is working 24/7 for all of us. He deserves respect and appreciation, not smears.
Bernie, your socialism would never allow a SpaceX to be built. Socialism has only proven to impoverish mankind and lead to death and destruction.
We need to create the conditions for more SpaceXs to be built, not attack the great entrepreneurs who are helping to advance our country.