I gave you a merit but it is not correct to say that they are highly leveraged. The issue lies in the business model, which was initially based on a 30% Bitcoin ARRR for the next 20 years, being higher now and lower at the end of that period. The crucial question here is whether they will be able to continue selling the business model in order to maintain sufficient demand to finance purchases and dividend payments. No one knows if this will be the case. Peter Schiff would say no, Saylor and Phong Lee would say yes, and I'm somewhere in between.

Change of narrative at Strategy.

Phong Le, Strategy CEO, detailed when they can sell Bitcoins:


So, in case mNAV turns below one, they can sell bitcoin to buy back more bitcoin buying back their own shares.

The complete analysis can be found here:

Strategy new ‘last resort’ to sell Bitcoin could trigger on 15% dip – sets $1.4B cash reserve contingency

Just remember that with the reserve fund they put in place, they are now safe for at least 21 months.

As an entrepreneur, I see Strategy Inc. as having excellent resilience and risk management. In addition to preparing a liquidity exit strategy, they don't evaluate assets from a diamond hand and have disciplined capital management, as evidenced by their threshold (mNav <1), risk protocols, prioritization of obligations to investors, and fallback plans.

The term "selling as a last resort" demonstrates their long-term confidence in Bitcoin as a premium monetary asset, its role as a reserve asset, and its dominance in the 2024-2030 macroeconomic cycle. Companies that are bearish on BTC won't hold on until the last resort. Strategy releases BTC for buybacks not to weaken, but to strengthen its BTC holdings per share. This is similar to a halving mechanism, but in an equity structure, or what could be considered a deflationary action in stocks.
The simulation suggests that if the mNAV drops, they sell BTC and then buy back undervalued shares, which will result in a decrease in the circulating supply, an increase in BTC per share, and an increase in leveraged BTC exposure.

What's impressive is that Strategy Inc. doesn't react panicky to volatility and views Bitcoin as a long-term treasury discipline. They boldly seem to be saying we're prepared for a long bear market without having to sell Bitcoin. Unlike most companies that don't disclose the trigger for selling key assets, I see this strategic action as aimed at reducing tail risk, strengthening trust, simplifying valuation models, and enhancing the credibility of treasury management. This action makes Strategy Inc. appear more investible.

I don't claim to be Mr. Smartie pants, yet I have made several posts on the topic that from my perspective, MSTR should have established systems in which they buy bitcoin no matter what every single week, so they have a budget for the buying of bitcoin, and yeah, even though I never mentioned the various dividends or products that have "guaranteed" or somewhat guaranteed payments, it would logically follow that those kinds of funds should be somewhat shored up, even though having reserves to pay several years of those kinds of expenses may well seem to go beyond efficient use of money, yet having enough funds to last at least through a whole cycle (which maybe even beyond 4 years) would seem within the realm of prudent.  

Of course, even though MSTR is a public company and they have quite a few disclosures of how they handle their finances, they might not necessarily share all of the exact particulars in regards to either execution or plans of what to do under various scenarios.. and many of us know that giving too many details can sometimes work to a disadvantage, especially when so many haters exist in the real world who would want to exploit whatever execution vulnerabilities might exist.

I find the timing a bit awkward on MSTR's current decision to create reserves since it comes off as defensive rather than proactive, even though it was likely a reasonable thing to do that should have already been done when BTC prices were higher and when there were various premiums rather than scrambling to accomplish during times that are not seeming as good for the company and/or the BTC price.. In other words, any proactive move would find these times as buying bitcoin rather than preserving and/or holding back dollars.

i am not going to be any kind of pro about buying on the way down and selling on the way up (which is my own personal practice), and surely when the BTC price goes down beyond expectations, I tend to run out of money to keep buying or at least, at some point, I have tended to have to end up having to reduce my BTC buy amount. .and I have gotten better and better at it through the years, yet a decently BIG company with so many bitcoin, legal and/or financial experts, they should be able to figure out way better systems than my own cashflow management systems, even if they are using way more sophisticated techniques than me, including their use of debt, credibility and other people money and/or confidence, which are things that individuals do not usually have to contend with.


Of course, I don't claim to know all of MSTR specifics, yet I know that many MSTR naysayers love to jump on the bandwagon of their ongoing impending doom, which is an exaggeration in the other direction which you have frequently been guilty of.

MSTR has frequently used other people's money and they have not overly encumbered themselves, and so the mere fact that they have some debts to service remains a pretty big so what in the whole scheme of things.

Yeah they own 650k bitcoin, and even if 1/5 of those BTC were encumbered in some kind of way, that would surely be manageable instead of presuming that MSTR is about to go under because they have some debts.  I doubt that MSTR is even close to 20% encumbered in their bitcoin holdings... yet the naysayers love to harp on unspecified implications that MSTR is overdoing its debt and blah blah blah.  Nonsense.^**

**  Edit: Of course, we could go by Fillippone's numbers and see that their debt service is about 10% of the value of the bitcoin holdings - which is higher than I had anticipated, but it is still a fairly reasonable number


Who gives any shits what Wall Street likes or wants?

Yeah, we already know that "WallStreet" is not very excited about MSTR since MSTR is largely speculatively attacking wallstreet with its use of debt and its investment into bitcoin... Saylor tries to talk all nice and formal about what they are doing, but it continues to be a speculative attack.. so why would Wall Street like that?..


Of course, anyone who is against MSTR, they are going to go on the attack and even spread FUD when there are opportunities to try to use the negative momentum to their advantage.  What else is new?


Sure.. He could have probably done it at a better time, but so what?  You seem to just love any opportunity to say "I told you so," when the fact of the matter is that you are more full of shit in your own kind of opportunism to jump on the band wagon.

Many folks already knew or should have had known when MSTR is purposefully playing around with leverage than its performance is going to be levered too.. so guys who fuck around with leverage by buying and/or selling MSTR to try to take advantage of such leverage, they might profit greater than usual or they might get burnt greater than usual by getting themselves on the wrong side of the trade.

Maybe instead of getting  excited about MSTR, you should make sure that your own bitcoin holdings are in order?  Yes there can be negative ramifications to the whole bitcoin market based on various players within the bitcoin market, yet at the same time, do you have your own situation figured out.  Yes, I know that you are likely not playing MSTR.. (I don't blame you for that),.. but what about the underlying?  Have you been scared away from the underlying too?  There are plenty of folks who get distracted in their own bitcoin accumulating and/or maintenance strategy based on what is happening with others and even quasi-irrelevant metrics such as "sentiment".. The reliance on quasi-irrelevant metrics can contribute to your own failure/refusal to build and/or protect your own bitcoin situation.


Yes.. a lot of this does depend on bitcoin's price performance in the coming year or two...

Your ongoing bashing of Saylor and MSTR contributes to my own wondering if you even know how to discern value in the bitcoin space, since yeah, Saylor/MSTR has inspired a lot of copy cats, and he has been engaged in attempts to evangelize various corporate treasury followers for the past 5-ish years, and he even had a business oriented bitcoin conference in early 2021. yet it has been taking some time for both corporate treasuries and/or even governmental treasuries to lean more and more towards getting bitcoin on their balance sheets, and surely many of the corporate treasuries that are likely to do better are those who come to bitcoin with their own strong financials rather than ONLY relying on other people's money to buy bitcoin for themselves (and then now finding themselves in the red).. and sure they might still be able to survive, yet there are needs to get through downward and/or sideways BTC price moves rather than being completely dependent upon bitcoin's price to pump for their own survival and prosperity.

Of course, since around October 10 or soon thereafter, there have been a lot of folks proclaiming that bitcoin had entered into a bear market and that the top was in, even though the top had just happened on October 6, so it seems that there have been a lot of premature calls, which seems to be your own specialty, The Sceptical Chymist.  I have a hard time imagining that you are not within the "we're in a bear market" camp.. which also likely contributes to your own ongoing failures/refusals to sufficiently/adequately prepare your own bitcoin holdings for UP...  

Yeah, in recent times, it has worked out all fine and dandy to be preparing for down, since some decent amount of down (36% so far) has been happening in recent times, yet guys preparing for down (including yourself) still need to act upon their downity doom and gloom preparations instead of presuming more downity is coming, when such additional downity might not happen.  I personally don't claim to know with any amount of meaningful confidence, even though I have been frequently suggesting that there are still not enough negative facts to support those seemingly premature proclamations that bitcoin has transitioned into a bear market (rather than the more likely scenario that we are merely in a decently large price correction and still within a bull market).

Even long term bitcoin holders can sometimes have their BTC holding conviction challenged when the BTC price drops 36% within less than 2 months. 

It can take years and years and years to both practice building of the BTC and holding through bad times, and surely many folks who hold through the bad times will also continue to buy through such bad times, even though surely several guys might have had been buying extra BTC all the way down on the dip, and perhaps have buys at various points on the way down, so some of the guys will just run out of extra money in order to buy more BTC, even though the BTC price keeps dipping, so at a certain point, they just have to HODL through the situation and perhaps just wait to see if more money comes in while the price is low or if the price might return to higher levels before they are able to buy more..

and yeah, many times, even the guys who have been buying a lot of bitcoin, they might feel that when they are continuing to buy bitcoin, they are buying relatively small amounts relative to the value of their overall bitcoin holdings, which is part of the reason that it can take a long time to build up holdings, especially for poor people who might not have a lot of money to work with in terms of their regular cashflows not necessarily adding up to a lot of discretionary income.


Yes.  There are guys who fuck up and they try to live off of part of their bitcoin holdings before they have built up their bitcoin holdings to a sufficient enough size.. Those are not really investors.  They are traders, and yeah, it might work out for them, but they are quite likely ongoingly diluting their investment and exercising too much in ability to wait (lack of patience), and they probably would be better off to attempt to shore up their various forms of income to increase their discretionary income so that they can continue to buy bitcoin, and yeah, sometimes they might be able to cut some expenses too.

But yeah guys do prematurely dip into their holding, and that does not mean that they are engaging in good practices merely because they had been able to profit from their holdings at various points along the way up.

Look at you.  You have been registered on the forum as long as me, and if you had merely stayed concentrated on accumulating bitcoin and not fucking around with trying to trade it or cash out too much too soon, you could have had accumulated more than 17 BTC over the past nearly 12 years, with merely a $50 per week investment into bitcoin, which would have been merely $21k invested.  It is hard to beat those kinds of returns, and it is quite likely that you have way under performed even a modest bitcoin investment since you had been fucking around cashing out too many BTC too soon and presuming that you were engaged in some kind of a smart practice, when in fact you were ongoingly diluting your bitcoin exposure and probably putting yourself into a position in which you have way fewer bitcoin than you could have had if you had stayed focused on accumulating bitcoin and holding your bitcoin rather than cashing out too many too soon at various points along the way.

Of course, I don't know the specifics of your situation, yet from your description of what you have been doing (and supposedly most guys), you have likely way underperformed your potential based on your lack of staying focused on accumulating BTC and/or HODLing it.

If you say that you have either outperformed or even come close to performing equal to a buying and HODLing strategy, I will be quite shocked about your level of luck.. and surely with any bitcoin investment, we should not be structuring our practices around luck.. since that is gambling and not investing.


Surely the CAGR can vary.. and yeah, around 5 years ago was when MSTR got into bitcoin, and surely they did not frontload their investment, but instead they were buying most of their BTC since the November 2024 Trump pump.. So their buying on the way up puts them into a bit of a worse situation, and so it will tend to take time to make up for various purchases that were made at high prices.. - those high prices brought their whole BTC holdings up in terms of the costs, and many normal people (or companies) might have had exercised strategies that were more measured and/or consistent, so even if they might have bought more bitcoin with the passage of time, many normal folks are limited by their own incomes and how much capital that they can get ahold of as compared with MSTR being quite skewed by their receipt of more money based on market sentiment and bitcoin price hype.

Surely some dumbass bitcoin naysayers and the other negative Nancies will make their measurements of bitcoin values based on selecting the 2021 top of the market and acting like any kind of fair and/or representative comparison can be reasonably made from starting at the top.

And of course, we can look at the 200-WMA.  We are $55,846 right now and in late 2020, soon after MSTR had started accumulating bitcoin we were at $7,352.  Of course, we would have been at even lower numbers with the 200-WMA in August 2020.  In any event, since late 2021 until now, That is 7.6x difference in the 200-WMA in the past 5 years.


Surely if there is a bear market now, then there will need to be some rethinking of how to structure the various treasury companies.  For sure the business model makes sense for cashflowing companies, yet it might not make as much sense when high amounts of leverage are used (and it is not even clear yet, if MSTR might have gone a bit overboard in regards to the amount of leverage that they had chosen to use).


That is surely problematic to suggest that a leveraging strategy is going to be sustainable if it is started at the peak,since the fact of the matter with Saylor's earlier performance is that he was a bit ahead of the 2021 price rise and he was able to regroup in 2022-2024, too... Yet, the extent to the late 2024 buys don't make as much sense, even though surely when guys are throwing money at you for the purpose of buying bitcoin, maybe it becomes hard to resist in terms of buying bitcoin as it is going up and at or near the top.


Yep. it is possible that 2026 could be either a bear market or flat.. It is difficult to know, and you are correct that a lot of hype would end up leaving MSTR, under such a scenario, yet it still might not mean that MSTR is a bad investment for 2027 and beyond.. but yeah, there are short-term, medium-term and long-term scenarios, and the performance of the longer term scenarios could get altered  based on how real world short-term and medium-term had played out.  Each of us has to be careful in terms of our own allocations and/or how much we might put into various assets, whether bitcoin or some bitcoin derivative product and/or other places that we might elect to put our time, energies and value.


The reason that any of us buy bitcoin should likely relate to investment timelines that are 4-10 years or longer, and so we already know that from time to time (especially on a calendar year basis or some other randomly described time period) it might be argued that bitcoin is not performing good enough and various other nonsense proclamations about bitcoin's relative performance, and surely any leveraged product that also includes third-party execution issues, there is likely to be variance - which shows that it can be difficult to beat the plain ole regular performance of bitcoin, that will still have ups and downs along the way, and yeah, even bitcoin is not guaranteed to be successful, yet we still choose our allocation level, and historically, those people who have aggressively allocated to bitcoin have greatly outperformed the S&P and almost any other asset - and even NVIDIA is likely going to have difficulties beating bitcoin on a longer time trajectory (yet to be seen)...

One of the other amazing things about bitcoin, is that there was no need to be absolutely correct as long as we were directionally correct, and also we did not necessarily need any special permissions to enter bitcoin since bitcoin is open to everyone and anyone as long as they had discretionary income.. And, yeah, each person may still have to figure out how to source their bitcoin, which likely remains challenging, depending on geographical location and perhaps depending on the adoption rate in any particular place.. It likely helps to have more normies in our social (and commercial) circles who know about bitcoin and who have taken some actions to start to accumulate bitcoin and to self-custody some of their bitcoin.


Hahahahaha

Look at you.  Mr. Neutral.

I sent you a smerit for this level of chuckle-inspiration, whether your self-assessment statement is true or not.


Look at you.

Coming in and ruinin dee moo.. .with your various out of touch fantasies - and in this case, the out-of-touchness has to do with granting so much of bitcoin's price moves to one actor - a common and ongoing myth, for sure.. .and these kinds of myths have frequently wrecked a lot of folks in terms of either getting them to sell too much too soon or getting them to insufficiently and inadequately prepare their own holdings for UP.

A side affect of ongoingly focusing on downs that may or may not happen is an inadequate and insufficient preparation for up.   Too bad for the many losers in this who either have no coins or have way fewer coins than they should have (and since you Wind_FURY  have been here since 2016, you shouldn't be in this low coiner no coiner club., but you just seem to ongoingly enjoy remaining in such a club).


Yes. 

The kinds of thoughts that folks who like having fun staying poor have.


You think that plebs are smarter than institutions?

Sure plebs have opportunties to move quicker, yet they are not automatically smarter merely because they are more nimble.

Some plebs ongoingly fail/refuse to sufficiently prepare for up and they think that they know more than they do... so they end up screwing themselves so that they continue to stay plebs forever and ever and ever, since they are their own worst enemy.


Surely, it might show that MSTR need to eat some humble pie from time to time, and surely from time to time, they are likely going to perform differently from the underlying.. even though the underlying should continue to guide its value.. and yeah if they are wreckless in terms of either borrowing against it or even not protecting themselves, then the market may well suss out those deficiencies and even suss out those deficiencies in irrational ways that might even involve punishing MSTR.

This is nothing new, they said a few months ago that they would only do ATMs in special cases below 1.5 mNAV. Even then, there was pressure on MSTR prices, and they could not lift it with this strategy. These announcements do not have a big impact unless the market is strong.

If it's truly the early phases of the bear cycle, how high, do you believe, is the probability that Strategy would sell some of their Bitcoin to buy back their own stock? That would probably sort of low, no? Since Bitcoin bear cycles have never been longer than an average of 18 months.  

Do you believe their 21 month life-line will last them for the whole duration?

Plus the pivot to real Q.E. could happen in 2026, which will be good for all markets, legacy AND crypto.