@benschmidtbtc Math v Emotion sums up the conversation.
Jeff doing what we all know he does best- remain calm and crunch the numbers.
Risk is globally mispriced. Allocate your capital based on math, not emotion.
Lots of posts today covering the significance of today’s large purchase announcement, and the contribution from $STRC — which looks like it’s just getting started here.
Instead, I want to address one topic in specific, which is mostly discussed by those who are more critical about $MSTR and it’s outlook.. and that’s regarding the aggressive use of the equity ATM near 1.0x mNAV.
It’s natural to be questioning what the logic is if it’s only neutral to mildly accretive for current shareholders.
Having followed @saylor very closely for over 4 years now, and listened carefully to every word he’s said — sometimes rewatching podcasts over again — what I know for sure is that this isn’t random or not thought through.
So the question we need to ask is, what is he achieving by it? ..and the answer becomes a little more obvious.
He is re-architecting what each MSTR share represents.
If you think of MSTR as a brick house.. composed of different quality bricks, each stacked on top of each other. That’s not very dissimilar to a company’s capital stack. Whereby the equity is the foundation, the most stable and the lowest risk.
Leverage came primarily from convertibles — high convexity, but with maturity and refinancing risk.
In order to shrink the convertible component (the hidden win), he needs to dilute them by issuing equity close to mNAV, thickening the equity base. A huge part of the long-run equity story is convexity management: reducing the share’s sensitivity to convertibles (dilution overhang + refinancing cliffs), and shifting the amplification engine toward preferreds.
The result is a healthier share with:
– Less maturity risk
– No forced BTC liquidation
– Max amplification that decays in fiat terms
The smaller the converts become as a % of the overall NAV, the less they matter, and the focus shifts purely to efficient amplification.
Can see it now:
“AI anesthesia robot in OR: monitor shows hypotension. Administering phenylephrine bolus. Subsequent blood pressure is still low. Administering ephedrine/vasopressin. Continues to administer pressors.”
IV is infiltrated and now you have an ischemic limb at the end of the case. There’s too many variables to account for in procedural specialties and especially the OR in my opinion.
@Halstonvalencia Funny that the orange party are now the rational middle in between left and right.. used to be the crazy ones in the corner playing with our bitcoins 😂