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.”“...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.”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.
non-paywalled via newsletterhunt:
https://newsletterhunt.com/emails/174135
I wonder how much of Strategy's shares are held for retirement accounts that have no better exposure to bitcoin.
a large chunk, I would guess
Eventually everything topples.
All it takes is for bitcoin to not do well for a while and then he will be hemmoraging.
But he is playing people well.
Only he will be the one to profit in the end.