lowstrife

My content is not financial advice.

[lowstrife @lowstrife]

@ripplobar Its a mathematical certainty. The only debate is over whether it goes out with a bang or whimper. I'm leaning more towards the latter these days.

[lowstrife @lowstrife]

The actual doom loop you should be worried about with MSTR is not them selling BTC to fund the preferreds. That's a rounding error. The true doom loop is one they've talked about in their calls - selling bitcoin to fund equity repurchases in an accretive manner.

[lowstrife @lowstrife]

And there's the bounce from the weekly 200. We are now likely rangebound.

[lowstrife @lowstrife]

Turns out: it was the top

[lowstrife @lowstrife]

The daily 200 has been the exact top of bear market rallies. 2014, 2018, 2021, today?

[Steven @Dogetoshi]

Saylor is up more on his BTC sells than his BTC buys.

[lowstrife @lowstrife]

@ripplobar https://t.co/CbLKISyyXl

[lowstrife @lowstrife]

The trouble presented is twofold 1) If the underlying stock does not hit performance targets, these products do not correctly mature into the final landing place of all leverage: common stock dilution. For the convertible debt, MSTR must either refinance or sell BTC to raise cash

[lowstrife @lowstrife]

@ContrarianCurse He's not a supporter. It's simply a vessel for extraction to them.

https://t.co/5DVMoKUhbo

[Michael Saylor @saylor]

We turn Bitcoin into Money. $STRC

[lowstrife @lowstrife]

Also, standard rules apply. If you're victory lapping on twitter, that's probably the peak\bottom.

[zoomer @zoomerfied]

[ ZOOMER ]

BITMINE FILES FOR PREFERRED STOCK OFFERING OFFERING A YIELD OF 9.5%: FILING

[lowstrife @lowstrife]

@thedefivillain It's not the monthly dividend sell pressure that's the problem. It's the broader market sentiment of a closed fund which is not closed anymore.

The flywheel runs perfectly fine in reverse.

https://t.co/PyipkqPBzk

[lowstrife @lowstrife]

The actual doom loop you should be worried about with MSTR is not them selling BTC to fund the preferreds. That's a rounding error. The true doom loop is one they've talked about in their calls - selling bitcoin to fund equity repurchases in an accretive manner.

[lowstrife @lowstrife]

@BTCoptioneer Inverse correlation bitcoin.

It's possible people sell their STRC holdings to buy bitcoin directly when prices get cheaper. This puts downward pressure on STRC, ontop of any credit\risk also acting on the price at the time.

[lowstrife @lowstrife]

@0xbenharvey Net accretive to common shares, yes, but STRC is still self-funding in that scenario.

[lowstrife @lowstrife]

@BigpictureBTC I'm not sure. Getting the $ will be hard

[Glenn Cameron @GlennOnrampBTC]

And Parker’s dead right and everyone piling on him knows it, which is exactly why not one of them has answered the question he actually asked.

Matt, you said “we intentionally have zero debt” as a flex. It isn’t. Parker asked you two dead simple things and you and Jeff both sidestepped them, so I’ll just say them out loud for the everyone here in public that is holding your preferred.

What does a real creditor get that your holders don’t? Three big ones.

One. Their money back. Debt matures. There’s a date, there’s a claim to par. Perpetual preferred has none of that. No maturity, no pull to par, nothing. Your only way out is selling to the next guy at whatever price is available that day.

Two. A coupon that actually has to be paid. Miss a bond payment and it’s a default, creditors accelerate and come after you. Skip a preferred dividend and… the board just decided not to pay you. That’s it. Can’t force it, can’t accelerate, can’t do a thing. You just don’t get paid.

Three. Seniority and covenants, and this is the one you really really didn’t want to touch. Creditors usually hold covenants stopping you stacking debt on top of them. Your holders don’t. So what’s stopping you loading up on debt tomorrow and shoving every preferred holder down the queue? Nothing. That’s the whole point. “Zero debt today” isn’t a protection, it’s just words that you can change at any time.

And the “digital credit” thing, come on. You’re calling perpetual preferred equity “credit” because credit sounds safe and boring, do your granny could own it. It isn’t credit. A Moody’s rating is just someone’s guess at default odds, it doesn’t turn equity into debt. “Debt = credit, credit ≠ debt” is you doing a little dance with words so people looking for safety end up buying equity risk. That’s the trick. Parker clocked it and you all got upset because he’s right.

And the bit nobody will say plainly: your incentive is to sell the paper above NAV and buy bitcoin onto YOUR balance sheet. Everyone holding it needs the next buyer to turn up and keep the premium alive. Not one person in this chain is trying to get a single human into bitcoin itself. Fine for you business interests. Just stop selling it as a mission. And “we turn bitcoin into money” is backwards, mate. You turn fiat into bitcoin. For yourselves.

“Good for bitcoin” and “good for the person who bought your preferred” are two completely different things, and you sell them like they’re the same thing. That’s the whole game. Parker’s the only one in here being straight about it.

Answer the debt question.

[lowstrife @lowstrife]

@bccponzi They have specifically talked about it on earnings calls as an option for them. I think they may.

[lowstrife @lowstrife]

@DonAlt but but but but I was told SBR, I was told bitcoin president

[lowstrife @lowstrife]

Will MSTR run the flywheel in reverse intentionally? I don't know. Its entirely up to them - there is no regulation forcing their hand.

The convertible debt remains an issue. There remains $3.5bn of debt with problematic strike prices that are increasingly unlikely to trigger.

[lowstrife @lowstrife]

Will MSTR "sell bitcoin", while also raising capital from STRC? I don't know. That situation turns STRC into being entirely self-funded by its own issuance. Dangerous place to be in.