Man, MONEY STUFF is such a wonderful effing newsletter, and Levine's writing is just nice to consume.
He has carved himself a little bit of a niche... so when wacky shit happens in financial regulation -- or Elon or Saylor does something -- he's gotta write about it!
Alas, yesterday with the MicroStrategy announcement of some other wild financial-engineering scheme to acquire bitcoin -- STRIFE, or STRF -- we get a nice, short run down. Also, just to clarify for everyone: Saylor and Strategy =
“...is in the business of selling securities to raise money to buy Bitcoin.”
yeah, pretty much.
Here are the previous finance-for-bitcoin attempts:
I thought that was kind of weird too: A convertible preferred with an 8% coupon and a 900% conversion premium is an unusual instrument — it doesn’t give you the equity exposure you normally want in a convertible — and in fact it struggled to find buyers. The name is also odd — I had never heard of “perpetual strike preferred stock” before, and I used to underwrite convertible preferred stock for a living — but you could parse it.
a “perpetual strike preferred stock” means something like “a convertible preferred stock with a strike price that is so high you might never convert.”
LOL owned, well then just enjoy the 8% while Saylor takes the funds you so kindly handed over and rides the bitcoin wave at, one hopes, more than 8%.
This does appear to be a non-convertible perpetual preferred stock. [3] I have no special technical knowledge about how to parse the name; the first four times I read it I thought it was a typo. It is not. So I assume it’s the obvious parsing: “If you buy this preferred stock you will constantly be engaged in bitter struggle and conflict.” Seems right. I could not love this company more.
He's comfortably chuckling in his high (ivory? glass?) journalistic tower, and the rest of us are entertained.
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