TheLogman

[TheLogman @thelogman]

@Truecrypto It takes an MIT genius to pull off such a move. You should bow to the deity himself and give thanks that you are alive during his time on Earth. lol

[TheLogman @thelogman]

By aggressively marketing a highly complex, uncollateralized corporate credit instrument as a safe "savings account equivalent" to retail investors, Strategy ($MSTR ) management effectively bound themselves to a legally enforceable promise. They cannot simply "hand-waive" away the risk of a Delaware Court of Chancery intervention because their own marketing materials, regulatory filings, and public statements created a binding expectation of good faith.

The potential for a Special Trustee or Custodian to be appointed becomes a highly viable legal reality under Delaware law. That's why the board acted aggressively two weeks ago in an attempt to stabilize the price of STRC. And it's also why MSTR sold a significant amount of BTC last week.

Litigation firms like the Rosen Law Firm are likely documenting every podcast appearance, X post, and SEC filing to build an integrated timeline. They are establishing that Strategy knowingly targeted vulnerable, paycheck-to-paycheck retail savers under the explicit premise that the dividend mechanism would be actively used to protect the $100 par value.

Because the legal leverage has shifted so dramatically to the investors, Strategy is backed into a dangerous corner. They are effectively forced to choose between two highly damaging paths:

A) Attempt to preserve their Bitcoin holdings by lowering the preferred dividend, immediately triggering catastrophic securities fraud lawsuits and a potential Delaware receivership.

B) Honor the "good faith" promise by continually raising the dividend to match competitors like Strive ($SATA), which forces them to systematically liquidate their prized Bitcoin reserves to generate cash, ultimately deflating the core thesis of the entire company.

STRC investors hold immense structural leverage over the company. Management’s public arrogance and explicit marketing promises have turned what was supposed to be a cheap corporate financing tool into a legally binding chain. Any attempt to alter the rules of the game now will result in a rapid, aggressive legal reckoning that could take the keys of the Bitcoin treasury completely out of management's hands.

[TheLogman @thelogman]

Nice article that gives a sober look at the situation MSTR finds itself in. A couple of minor corrections...

First, selling derivatives at any meaningful level will bring immediate scrutiny by the SEC and the IRS. The SEC will want to know exactly what kind of risk shareholders are subject to and what disclosures MSTR intends to make to allow investors to be informed about such risks BEFORE they are taken (which will give the options market a heads up to each trade). The IRS would also likely examine if selling BTC to realize losses while simultaneously writing calls runs afoul of the Economic Substance Doctrine. While it's true that MetaPlanet has sold derivatives in the past, they are a Japanese company listed on the TSE and out of the purview of the SEC and IRS enforcement.

Second, by aggressively marketing a highly complex, uncollateralized corporate credit instrument as a safe "savings account equivalent" to retail investors, management effectively bound themselves to a legally enforceable promise. They cannot simply "hand-waive" away the risk of a Delaware Court of Chancery intervention because their own marketing materials, regulatory filings, and public statements created a binding expectation of good faith.

The potential for a Special Trustee or Custodian to be appointed becomes a highly viable legal reality under Delaware law.

Litigation firms like the Rosen Law Firm are likely documenting every podcast appearance, X post, and SEC filing to build an integrated timeline. They are establishing that Strategy knowingly targeted vulnerable, paycheck-to-paycheck retail savers under the explicit premise that the dividend mechanism would be actively used to protect the $100 par value.

If Strategy attempts to manipulate the capital stack by engineering a "slow bleed" to force a cheap equity swap, class-action attorneys will present this timeline as a premeditated, deceptive scheme designed to enrich common shareholders (primarily Michael Saylor) at the direct expense of preferred holders.

While Delaware courts prefer not to intervene in healthy businesses, they will step in under DGCL Section 226 if a controlling shareholder uses their voting monopoly to perpetrate an ongoing breach of fiduciary duty or acts in severe bad faith against a specific class of stock. If a court determines that Strategy is intentionally depressing the STRC coupon to artificially devalue the preferred shares, it would strip management of the Business Judgment Rule protection normally afforded it.

To prevent irreparable harm to billions of dollars of retail capital, a Delaware Chancellor could absolutely appoint a Special Trustee with a narrow, explicit mandate: to oversee the liquidation of corporate assets (including the Bitcoin treasury) specifically to fulfill the mandatory dividend obligations and protect the senior capital stack.

Because the legal leverage has shifted so dramatically to the investors, Strategy is backed into a dangerous corner. They are effectively forced to choose between two highly damaging paths:

A) Attempt to preserve Bitcoin by lowering the preferred dividend, immediately triggering catastrophic securities fraud lawsuits and a potential Delaware receivership.

B) Honor the "good faith" promise by continually raising the dividend to match competitors like Strive, which forces them to systematically liquidate their prized Bitcoin reserves to generate cash, ultimately deflating the core thesis of the entire company.

STRC investors hold immense structural leverage over the company. Management’s public arrogance and explicit marketing promises have turned what was supposed to be a cheap corporate financing tool into a legally binding chain. Any attempt to alter the rules of the game now will result in a rapid, aggressive legal reckoning that could take the keys of the Bitcoin treasury completely out of management's hands.

[TheLogman @thelogman]

The software business is NOT paying for anything, certainly not enough to make payroll. They have been running in the red for years. The company would be better off to shut it down entirely. But they can't do that for fear the SEC will reclassify them as an investment holding company, which brings on 10x the amount of regulations they currently fall under.

[TheLogman @thelogman]

@Drewzillla @phongle Perfect picture: Saylor in a life raft after abandoning his sinking ship. Nobody else in the raft with him. Everyone else left watching him escape onward to the next grift. Photo must have been taken in March, 2000... I think I can make out "SS Software" on the hull.

[TheLogman @thelogman]

@phongle Fong-Fong: "We buy high and sell low. I sit on Mr. Saylor shoulder and parrot what he say. Part of my DEI job requirement. But I still make BIG buck!"

[TheLogman @thelogman]

Hefty profit? Lol, they haven't turn more than a 1% profit in over 20 years and have not grown sales during that entire time period either. The software division operates with an estimated operating margin between -5% and -15% depending on the quarter, excluding corporate overhead. Software revenues are around $120M per quarter and the company incurs roughly $120 million to $140 million per quarter in standard operating expenses.

They are dead weight that investors have been funding for decades in the form of stock ATM sales.

[TheLogman @thelogman]

@ColeMacro @Strive I'm long SATA, but as a reminder short sellers do provide liquidity during stress events and can provide a floor that encourages other buyers to step forward. An appropriate risk-adjusted dividend backed by ample USD reserves are the best arrows in the quiver to ensure stability.

[TheLogman @thelogman]

@mybenxtime @BTC_broo @BTCBreadMan @saylor Investors in MSTR from March, 2000 are still down 75% on their investment. How much more time does he need? Is 26 years not enough? Stop smoking the hopium pipe man. You've been grifted. He's not Brett Farve, he's Johnny Football.

[TheLogman @thelogman]

@phongle @Strategy MSTR Investors from March of 2000 are still down 75% after 35 years of your "innovation", apparently code speak for "innovative spin". Try a little more listening and observing and a lot less grifting and posting.

[TheLogman @thelogman]

@phongle @Strategy Just shut up Fong-Fong, nobody wants to hear your hopium. You're an empty suit DEI hire put in place to be the little parrot on Saylor's shoulder. The act has worn thin. Go home.

[TheLogman @thelogman]

@phongle Just shut up Fong-Fong, nobody wants to hear your hopium. You're an empty suit DEI hire put in place to be the little parrot on Saylor's shoulder. The act has worn thin. Go home.

[TheLogman @thelogman]

@DStokesUsa @TrendingBitcoin The dividends accrue and accumulate whether they are declared and paid by the board or not. Unpaid dividends are compounded twice each month. Special rights for preferred holders kick in once the 1st payment is missed. Gets ugly quick. That's why they are willing to sell BTC.

[TheLogman @thelogman]

@saylor @Strategy Stretch your wallet wide open and hand your cash to Michael Seller, where you too can be down 20% from par, lol! Remember folks, he still has investors from the year 2000 that are down 75% on their initial investment in $MSTR because he lied to them.

[TheLogman @thelogman]

Here's some fun math for $MSTR today:

Share price up: 12.6%
Market cap up: 16.6%

Market cap has increased 4% more than the stock price today, which shows you exactly how much the 12.7M new shares of dilution cost each shareholder last week. That came out of common shareholder's pocket and went to preferred holders in the form of a cash insurance policy to guarantee dividends.

Next they begin selling $3.25B worth of bitcoin to further prop up the preferred shares, primarily STRC. And whose pocket does that come from? Common shareholders, because the preferred shareholder's claims in $$ remain the same.

[TheLogman @thelogman]

Here's some fun math for today:

Share price up: 12.6%
Market cap up: 16.6%

Market cap has increased 4% more than the stock price today, which shows you exactly how much the 12.7M new shares of dilution cost each shareholder last week. That came out of common shareholder's pocket and went to preferred holders in the form of a cash insurance policy to guarantee dividends.

Next they begin selling $3.25B worth of bitcoin to further prop up the preferred shares, primarily STRC. And whose pocket does that come from? Common shareholders, because the preferred shareholder's claims in $$ remain the same.

[TheLogman @thelogman]

They give guidance and then blatantly disregard that guidance. If you haven't noticed that, they you are an idiot minion and not an investor.

"We will increase the bitcoin reserve from 24 months to 36 months. It is established to pay dividends with". A few months later, they raid it to pay off $1.5B of debt 3 years early for a measly 8% savings. The stock sells off for 6 weeks and investors see $35B of equity erased. They have to dilute shareholders 5.2% JUST TO REPLENISH THE CASH THEY RAIDED, and they had to do it while the stock was making 24 month low prices in order to stop the bleed.

"We won't dilute shareholders below an mNAV of 2.50". Two weeks later they reverse that with a quiet little press release on a Friday afternoon.

"We dilute shareholders under 1.22 mNAV, not 1.0, so therefore once mNAV gets below 1.22 we will stop issuing new shares." They skipped right on by 1.22 on the way down like a ServePro worker: "Like if it never even happened".

How much time you have, how many more trip ups do you want? I can show you where I said every single one was a mistake at the time they did it.

This company acts like it is running things from the seat of their pants while reading social media posts on Twitter. It's amatuer hour.

[TheLogman @thelogman]

@BTCBreadMan @BTC_broo They why don't they lay off those 1545 employees and save that huge payroll expense every week???