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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
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 ?