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131 sats \ 3 replies \ @freetx 7 Aug \ parent \ on: Bitcoin celebs now sell shitcoin treasury companies. bitcoin
A point to consider: MSTR has basically proved that so far it has been cheaper to use financial engineering to "mine" bitcoin then to actually do it with actual hardware.
From that perspective, they are generating bitcoin more profitably than miners, thus have been rewarded with a 1.7x mNAV based upon that efficiency.
Now here is the big question: Will using "financial engineering mining" be more or less effective in a low-interest rate environment? (To my view it will be more effective with lower interest rates).
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I did some research into the Strive merger (Viveks company that is turning into a BTC). Although I'm not going to invest (mNAV offering is too high at 2.2x) I do think they have some clever strategies.
Essentially they are looking to merge with companies with "stranded capital". As example, take some biotech company that has $70M in cash on its balance sheet but their drug either failed approval or failed in actual testing....that company in many cases will be trading at 0.9 NAV (ie. less then the cash they have). Although counter-intuitive, thats because there are not lots of good options for them....if they simply close up shop and dividend out the money then it all shareholders get hit with ~15-30% tax hit....
What Strive is offering is: We will give you mNAV 1:1 shares in our BTC company in return for your cash. Then obviously putting that cash into more BTC.
My point on this, is I think the innovation and financial engineering still has a long runway.