I wrote some posts about Strategy and its bagholders in recent days but alas Scoresby is still beating me to the sweet, sweet sats coming off Saylor, by way of Blok's block rewards. I shall have my revenge or die trying!

#1514431, #1517667, #1517660

HOW COULD I HAVE MISSED THIS GEM??HOW COULD I HAVE MISSED THIS GEM??

Yeah, Coben killed it on Monday!!

As much discussed in FT Alphaville, Michael Saylor’s bitcoin accumulator Strategy (née MicroStrategy) has seen its common stock and flagship “Stretch” preferred stock spiral downward over the last month. We’re not sure this situation is salvageable, but at minimum any rescue plan requires rowing back on previous plans and eating a big slice of humble pie.

Saylor? HUMBLE PIE?! Oh, forget it.

With the common stock MSTR and Stretch over the past month falling 45 and 20 per cent respectively, management needed to reclaim some agency over events.

yeah, that's how I read it, too. We must do SOMETHING!

Five parts:

1. Ringfenced 2.55bn for paying interest and pref divs.

this represents approximately 17.4 months of coverage at current run-rates, or 25.9 months if you include $1.25bn of the “Board-authorised reserve-building BTC monetisation capacity” — ie bitcoin it has been authorised to sell but has not yet actually sold.

I loved that shit (made me laugh!)... "monetization capacity" -> you mean selling? Nono, just the capacity to sell! Obviously.

2. increase STRC dividend. (We who are about to die from prediction market betting, salute you for your sacrifice)

A 12 per cent coupon (and over 15 per cent current yield) is more akin to a junk-rated or even distressed instrument, but this money market wannabe has “broken the buck” by a humongous margin.

I caught it wicking down below $72. Don't tell anyone. That silly, silly man @grayruby traded it #1514869

3. Sell bitcoin (at distressed, we're-all-dying prices) and juice that sweet tax loss harvesting, to repurchase Stretch at 75c on the dollar. That's gonna be incredible.
4. Surrender the par thing... no, it was never SUPPOSED to be a money market fund. Look, even Bailey said so; must be genius-level clever.
5. 1bn stock buyback... (with what?!) and the previously mentioned BTC Monetization Program (= sale of BTC).

"These represent significant retreats from the original bitcoin treasury project, whatever Michael Saylor, Strategy’s co-founder and executive chairman, may claim.""These represent significant retreats from the original bitcoin treasury project, whatever Michael Saylor, Strategy’s co-founder and executive chairman, may claim."

precisely. Also, this:

Whatever the fine rhetorical distinctions, it’s clear that the biggest corporate owner of bitcoin is now a seller, and likely for more than just $1.25bn. After all, where will management find the $2bn for the buybacks of the preferred and common stocks?

Have fun staying poor, Bitcoiners (and Saylor bagholders).

if the buybacks are funded by selling bitcoin, then Strategy is liquidating the asset that had justified last year’s preferred issues in the first place. This is an extraordinary volte-face in a short period of time.

"Strategy is now discovering that enthusiasm, like bitcoin’s price, does not travel in one direction only.""Strategy is now discovering that enthusiasm, like bitcoin’s price, does not travel in one direction only."

TL;DR: too bad SATA(n) is back roughly to par, STRC at 87 (i.e., no longer entirely dead...?). Good trade, Ruby; an entire year's worth of dividend payments in, like, four days.

archive: https://archive.md/wCQ0L