Damus
Energy Producer profile picture
Energy Producer
@Distributed Power

I stack therefore I am

Relays (8)
  • wss://merrcurrup.railway.app – read & write
  • wss://nostr.land – read & write
  • wss://relay.primal.net – read & write
  • wss://zapbox.fiatjaf.com – read & write
  • wss://purplepag.es – read & write
  • wss://nostr.btczh.tw – read & write
  • wss://welcome.nostr.wine – read & write
  • wss://nostr.maximacitadel.org – read & write

Recent Notes

Great Ghee · 3w
Yep that’s an option now as of a couple weeks ago 🫡 https://blossom.primal.net/9ea226a866a624399b48e56657d11c393a35dadc177c2c050bea52dc15951f5e.jpg
Repeatedly nuked profile · 9w
It's a tale of two cities right, with the stock being city number two. If they become a zombie company that just sits on bitcoin without growing, the stock price will collapse because the current valu...
Energy Producer profile picture
Listen if you think BTC stops growing I concede this a a bad idea. However, their fixed costs (10.5% on $8B) are small relative to their capital stack ($58B btc) so they can bridge any market type short term. Those fixed costs are their product, so in a scenario where their prefs continue to grow rapidly as they are, they keep growing their capital stack faster than just holding BTC - this is easy to imagine if btc does 20-30 CAGR% over medium to long term. However it’s balanced by adding counterparty credit risk to operate, there is no free lunch.

I’m not saying you or anyone should invest or not, but to imply they have a risk of collapse in a growing or short term stagnant BTC market is wrong I think. Their structure makes sense relying on two key factors -> counterparty risk of operating the business + BTC going up. Either of these fail MSTR will fail too.

Thanks for the chat. 🙏
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Repeatedly nuked profile · 9w
I'll agree with you there. This whole thread is in response to the assertion that "almost all of [the treasuries] are in the green down to ~60k", and that without any price rise MSTR is still sitting pretty. Of course if the price keeps going up steady (or better yet jerkingly) then MSTR's model k...
Repeatedly nuked profile · 9w
Kinda ignores the reality of how their growth engine actually works tho. To refill the burn they need to issue stock But if the stock is trading at a discount because of a stagnant market (which is wh...
Energy Producer profile picture
Fair enough that the path to get to and from $85k to next year or even further matters for a derivatives strategy. So let’s assume MSTR is completely flat in perpetuity for next 5 years at $85k, no big rate reductions to lower their dividend payments and in 2028 they need to either issue equity or sell some BTC to fund current $0.9B burn rate (and let’s assume the 5 yrs of steady above market pref returns does not attract new capital). If mNAV is below 1 they sell BTC to do for next 2 years to get to 2030 that’s 3% of holding. So what - they need a 3% rise in BTC $ price after 5 years to stay flat? I only think this matters if you think BTC will not compound 20-30% CAGR over next 10-15 years with up to 5 year periods of sideways action. They can bridge 5-10 years if they have too and they will still have largest corporate stack by an order of magnitude.
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Repeatedly nuked profile · 9w
It's a tale of two cities right, with the stock being city number two. If they become a zombie company that just sits on bitcoin without growing, the stock price will collapse because the current valuation is based on growth, not just holding. Your 20-30% CAGR, that’s a fair bet, but their current...
Repeatedly nuked profile · 9w
Sure but if Bitcoin is still $85k in early 2027 and their cash is almost gone they must either sell Bitcoin or issue shares at a potential discount to pay the bills. Or at some point in 2027 anyway.
Energy Producer profile picture
That’s not exactly accurate. They have $1.4B in a cash reserve 21 months of dividends to support the preferred equities. They can tap the ATM on the at preset $8B of prefs even if the prefs don’t grow. They can sell covered calls against their BTC to also generate cash if BTC stays at $85k. They have stated if it stays flat they estimate needed to sell by 2065 based on a derivatives play (I have not checked math but I think it’s closer to 2040)
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Repeatedly nuked profile · 9w
Kinda ignores the reality of how their growth engine actually works tho. To refill the burn they need to issue stock But if the stock is trading at a discount because of a stagnant market (which is what we're talking about here) that issuance becomes highly dilutive to shareholders. As for the ATM t...