Sergio Sejas

Climate Scientist Ph.D. | Bitcoiner | Views expressed solely my own.

[Sergio Sejas @SergioSejas]

Truly an honor to be a guest on tpb, much more having the undeserved honor of being its last. Thank you Mark and Tom for giving underrepresented bitcoiners a platform, you've made a difference. Wishing you both much success on your future endeavors!

[The Progressive Bitcoiner @TPB_Inc]

It is with a heavy heart that I have come to the final episode of the progressive bitcoiner #40

My guest is @SergioSejas – as a climate scientist, he shares his thoughts, expertise, and dreams about a #Bitcoin future.

https://t.co/cYHYdrcyUG

[Sergio Sejas @SergioSejas]

@BitPaine It's both. Or at least that is how @saylor sold it: near stable par value while getting a dividend.

[Sergio Sejas @SergioSejas]

@BitPaine Yes the principal never has to be paid back and the more it falls the more sense it makes to buy it all and get rid of the dividend obligation. The problem is the loss in confidence in strc and real possibility it doesn't get back to 100, while continuing to pay the dividend.

[El Programador Senior @5eniorDeveloper]

Esta es la mejor manera de ver el mundial!

[Sergio Sejas @SergioSejas]

A bit disingenuous to say the balance sheet is unaffected. 1. The dividend needs to be paid so either MSTR shareholders are diluted, BTC is sold which can cause btc to decline affecting the value of its balance sheet and decreasing the price of MSTR, or usd reserves are used depleting the runway and eroding the confidence in their stock and preferreds. 2. Interest rate is raised meaning more pressure on the above and no guarantee it goes back to par. These all impact the balance sheet. Buybacks would just accelerate the impact by being a more aggressive lever to restore par value and confidence.

[Sergio Sejas @SergioSejas]

Unfortunately you could see this coming and course correction will be painful.

[Sergio Sejas @SergioSejas]

The biggest miscalculation wasn't selling 32 btc. It was draining the cash reserve, which was exacerbated by the btc selling. Saylor's main objective should now be to replenish the reserve to at least 18 months. This could be done by selling a substantial amount of btc as Jeff indicates or perhaps by raising the strc yield significantly and then selling strc shares at 100 and using the proceeds to replenish the reserve. Selling mstr common can also be used. Reserve needs to be raised or this can get ugly.

[Sergio Sejas @SergioSejas]

Agreed. Other option should be to aquire a positive cash flowing business or become one, otherwise they are just buying themselves time with these options.

[Jeff Dorman @jdorman81]

MSTR pickle continues: What I laid out 2 weeks ago is still the only viable path to save $BTC and $MSTR in the short-run.

Either sell an enormous amount of BTC and MSTR to help bring $STRC back up near par, and at least buy yourself some time, or continue to watch every part of your cap structure melt because of the uncertainty you've created.

My base case right now:

-70% odds they just keep doing what they're doing, selling small amounts of MSTR every month at non-accretive levels, crushing the stock til it falls to .70 mNAV. This would give STRC holders at least a glimmer of hope, and BTC would be fine, but MSTR would get hammered.

- 25% chance he does the right thing, admits he messed up when he bought back the debt, sells $3-4 bn of BTC, buys a ton of time (marginally good for MSTR, good for STRC, bad for BTC short-term but good long-term)

-5% chance he does the nuclear option -- kills the dividends, letting the prefs fall to 30-40 cents on the dollar, which will close the capital markets to him, but at least shuts off the $1.7 bn per year cash outlay problem, and gives BTC a chance to recover over several years.

FWIW -- MSTR is still trading at 1.15 mNAV using the correct calculation:

$54 bn BTC on balance sheet
+ $1 bn USD cash
- Less $5.2 bn debt
- Less $14.6 bn prefs (including STRC)
= $35.2 bn of unencumbered BTC

$40.4 bn MSTR equity market cap

$40.4 bn / $35.2 bn BTC = 1.15 mNAV

Which means -- MSTR still going a lot lower (should trade at a discount to NAV now).

[Sergio Sejas @SergioSejas]

Exactly, well said. Today's increase is a start but much more is needed.

[Lyn Alden @LynAldenContact]

@BitPaine While we shareholders are arm-chairing on what they should've done...

They said in the prior earnings call they would keep over $2.25B+ on the dollar reserve. They then dipped to $900M.

I'm in the conservative camp. Would be happy to see guidance said, and then delivered.

[Sergio Sejas @SergioSejas]

@LynAldenContact I don't think Saylor can destroy Bitcoin. But the market will try to get him to puke the bitcoin if the cash reserve runway is short enough.

[Sergio Sejas @SergioSejas]

@JoshMandell6 The basis point increase is needed.
https://t.co/88YCUcW8jT

[Sergio Sejas @SergioSejas]

The biggest miscalculation wasn't selling 32 btc. It was draining the cash reserve, which was exacerbated by the btc selling. Saylor's main objective should now be to replenish the reserve to at least 18 months. This could be done by selling a substantial amount of btc as Jeff indicates or perhaps by raising the strc yield significantly and then selling strc shares at 100 and using the proceeds to replenish the reserve. Selling mstr common can also be used. Reserve needs to be raised or this can get ugly.

[Sergio Sejas @SergioSejas]

The biggest miscalculation wasn't selling 32 btc. It was draining the cash reserve, which was exacerbated by the btc selling. Saylor's main objective should now be to replenish the reserve to at least 18 months. This could be done by selling a substantial amount of btc as Jeff indicates or perhaps by raising the strc yield significantly and then selling strc shares at 100 and using the proceeds to replenish the reserve. Selling mstr common can also be used. Reserve needs to be raised or this can get ugly.

[Jeff Dorman @jdorman81]

Only one scenario saves bitcoin:native and $MSTR in the short-term.

Saylor has to come out and say (via Monday's 8K, or next Monday's 8K):

"I sold $4 bn of MSTR and BTC... we now have 2.5 years before we have to raise money again... dividends are covered for 2+ years, debt doesn't mature til sept 2028 (puttable in 2027) and that's easy to refinance via more converts".

If he does that, the market rips, and might even rip 20-30%. It once again makes MSTR uninteresting for years, but that's a good thing. STRC probably goes back close to $100, but he won't be able to sell more. And while capital markets might be closed to MSTR for awhile, it at least buys a ton of time, and in that time who knows what other catalysts might pop up.

He should have done this last week instead of that misguided $2.5mm teaser sale.

If he doesn't, and he continues to just wait it out (only has 5 months), or he sells tiny amounts as he goes (just enough to pay each monthly dividend), this selling won't stop

[Sergio Sejas @SergioSejas]

@jdorman81 Generally agree. But why wouldn't he be able to sell strc again if it reaches 100 again? Then use a portion to increase the reserves and buy bitcoin with the rest.

[Robert Griffin III @RGIII]

Florida State is the first Undefeated Power 5 Conference Champion to not get into the College Football Playoff. Despite the ACC having a 6-4 record against the SEC this year. Despite their defense not giving up 30 points in a single game all year. Despite their offense having more yards in the ACC Championship than Michigan had in the Big 10 Championship. Despite holding Louisville’s Top 20 Offense to 6 points. Despite beating 4 Top 25 teams. Despite finding a way to win with their Back up QB in a bitter rivalry game. Despite finding a way to win with their 3rd string QB in the ACC Championship Game. Florida State EARNED their spot in the CFP on the field. With and Without Jordan Travis. You don’t punish or diminish the work of 100+ players and coaches because 1 player is not there on the field calling the shots. FSU always answered the bell this year and their response to losing their QB was to play POSSESSED ON DEFENSE. It’s an absolute travesty that they were excluded from the CFP.

[Murray Rudd @DrMurrayRudd]

A new peer reviewed paper titled “From mining to mitigation: how Bitcoin can support renewable energy development and climate action” presents findings about #bitcoin mining. The Oct 27th paper is behind a paywall, so I'll provide the key points in a🧵https://t.co/wKQruBJUEK

[Carbon Brief @CarbonBrief]

Factcheck: 21 misleading myths about electric vehicles | @DrSimEvans

Read: https://t.co/169XDrplDS

[Sergio Sejas @SergioSejas]

@thetrocro @Blue_CollarBTC 100%. In general, greater flexibility allows for lower costs.

[Sergio Sejas @SergioSejas]

@RdoPeta @LynAldenContact 100%, which is another reason why I like renewables.

[Sergio Sejas @SergioSejas]

@eudaimoniawuwei @LynAldenContact I agree there's more to it. Yes, we won't be able to completely get rid of our dependence on hydrocarbons. Yes, batteries and btc mining are parts of the solution. Markets optimize towards that which provides the most energy at the cheapest cost. Will checkout the pod. 👍

[Sergio Sejas @SergioSejas]

@eudaimoniawuwei @LynAldenContact Well, hydrocarbons have the additional environmental issue of drilling. On top of that hydrocarbons can only be used once, while minerals used for renewables can be recycled. Not to say this transition will be easy but it's necessary to achieve BOTH goals. https://t.co/zYTBHwgCAj

[Republicans against Trump @RpsAgainstTrump]

I’m starting to think it wasn’t a “Perfect call”…

“I just want to find, uh, 11,780 votes”