Has anyone done the maffs on the effective BTC sales price when he buys back STRC below $100?
The dumbs on X keep talking about him selling the bottom, but since dumbs are wrong about everything that implies buying the dip in STRC adjusts the effective BTC rate.
I haven't done the exact numbers (yet?), but your intuition is correct, I think. (and, ironically, would not have been correct before they made the net-metric adjustment in July, which the Saylorbois gave me so much shit about critiquing... #1544738, #1531037)
So, before net metrics: the outstanding amount of prefs don't matter for the bitcoin-per-share calculations, so repurchasing STRC (above or below $100) is immaterial. Invisible, really, if all you're looking at is effective bitcoin per share rate.
After net metrics: now the dollar amount of the prefs owed gets netted out of assets before dividing by shares, meaning that repurchasing them at $94 is an instant 6% "improvement" in that portion of the capital stack #1544738.
Problem, of course, is that the funds they used were a) bitcoin they own, so that reduces the "bitcoin" term of the bitcoin-per-share calculation, b) cash raised from common stock, so diluting shareholders ~2% to raise funds and retire STRC at 6% discount is only meh accretive.
Haven't been down the rabbit hole of the metrics change, or even what it was before... my intuition abstracts to roughly:
Sell STRC at 100 to buy Bitcoin at 70k
STRC tanks 15%
Bitcoin tanks 10%
Sell Bitcoin to buy back STRC
MSTR captures 5% spread
Basically a carry-trade
Shouldn't effect the bitcoin-per-share negatively I don't think on-net since the 5% was captured in Bitcoin, and the debt is destroyed that would eventually necessitate future sales
Well, the trouble is that most of the money they raised wasn't via selling bitcoin but by diluting MSTR -- bitcoin sales were, comparatively speaking, quite small and bitcoin's dollar price doesn't matter for the "bitcoin-per-share" metric -- which doeees negatively impact the BPS
Honestly, i'm impressed by how much bitcoins price has been holding up with all this. Then again, is saylor really holding any real bitcoin or just claims in "coinbase custody"?
Has anyone done the maffs on the effective BTC sales price when he buys back STRC below $100?
The dumbs on X keep talking about him selling the bottom, but since dumbs are wrong about everything that implies buying the dip in STRC adjusts the effective BTC rate.
@denlillaapan ?
well, yes. I'm with you re: the dumbs on Twitter.
I haven't done the exact numbers (yet?), but your intuition is correct, I think. (and, ironically, would not have been correct before they made the net-metric adjustment in July, which the Saylorbois gave me so much shit about critiquing... #1544738, #1531037)
So, before net metrics: the outstanding amount of prefs don't matter for the bitcoin-per-share calculations, so repurchasing STRC (above or below $100) is immaterial. Invisible, really, if all you're looking at is effective bitcoin per share rate.
After net metrics: now the dollar amount of the prefs owed gets netted out of assets before dividing by shares, meaning that repurchasing them at $94 is an instant 6% "improvement" in that portion of the capital stack #1544738.
Problem, of course, is that the funds they used were
a) bitcoin they own, so that reduces the "bitcoin" term of the bitcoin-per-share calculation,
b) cash raised from common stock, so diluting shareholders ~2% to raise funds and retire STRC at 6% discount is only meh accretive.
Haven't been down the rabbit hole of the metrics change, or even what it was before... my intuition abstracts to roughly:
Sell STRC at 100 to buy Bitcoin at 70k
STRC tanks 15%
Bitcoin tanks 10%
Sell Bitcoin to buy back STRC
MSTR captures 5% spread
Basically a carry-trade
Shouldn't effect the bitcoin-per-share negatively I don't think on-net since the 5% was captured in Bitcoin, and the debt is destroyed that would eventually necessitate future sales
ah, I see what you mean.
Well, the trouble is that most of the money they raised wasn't via selling bitcoin but by diluting MSTR -- bitcoin sales were, comparatively speaking, quite small and bitcoin's dollar price doesn't matter for the "bitcoin-per-share" metric -- which doeees negatively impact the BPS
I think diluting stock to buy back STRC at a discount is fine if the same assumptions apply, STRC tanks more than the stonk
I suppose BPS would decline from the middle of the operation out, but still be on-net +5% start to finish
All part of the plan
Good
Honestly, i'm impressed by how much bitcoins price has been holding up with all this. Then again, is saylor really holding any real bitcoin or just claims in "coinbase custody"?
Bitcoin is money. you save it, you spend it, ammirite! (hopefully more of the prior)