Jack Mallers OUT as XXI CEO, Saylor stacks cash, Lyn Alden's News | Bitcoin Treasuries Takeover

[00:00:00]here uh with the usual crew. I've got Even Chase with me today on the Bitcoin Treasuries Takeover. Uh thank you guys so much for tuning in. Make sure you hit like and subscribe here if you're joining us today. Um so you can join us every week, Tuesday at noon Eastern. We got a little bit of a late start today.

[00:00:17]I blame uh traffic for that. But we've got So we talk about this every show.

[00:00:22]Um, you know, strategy is always the lead story, but I think we've got maybe a bigger story today, and that is Jack Malers is out as CEO at 21. Uh, there's been uh some juggling on on uh you know, the strategic vision of of what 21's doing. They're no longer acquiring Strike, but um maybe Eve, I I'll start with you here. Um, give us get give us the news. Um, and and what are your initial takes, you know, upon hearing this this this kind of dropped this morning? Um, Malers is out. Um, you know, we we've been waiting for 21 to do something for a long time. They've had some big like teaser announcements and uh this one's just another [laughter] another announcement without uh you know it's different than than the previous ones but uh um we still don't know exactly what they're going to be doing but uh take it away Eve.

[00:01:19]>> Yeah. So we had Jack Mers come come out and say that he's stepping down as the the CEO of 21 Capital right and um Rafael Zaguri who is the or who um who is the uh CEO of the Electron Energy which is also a company that was about to be integrated within this 21 capital um kind of conglomerate if I can call it so um will be taking over a CEO O and uh yeah so this is quite fresh news from from today and uh yeah so first takes on on this from my end is I'm I'm actually happy to see Jack Mers take a a step out of of this conglomerate because it seems like it didn't fit him right according to what he was talking about um I think a lot of people are also happy to see that um they're getting their boy back because he's like one of the OGs one of those um kind of more cipher punk uh Bitcoiners. So overall, I think the at least on X, it looked like the the mood was was quite positive on on that. I also had friends texting me about it.

[00:02:27]The Bitcoiner friends that I've known for a long time who are also a bit more cyber punk um were quite happy about the news. And uh I think it's it's good for also the the whole uh industry you know just to to have these these moves as well just in general to to see that there are still uh the Jack Mers of this world who who are not willing to play by the rules. apparently there were some issues or there at least they weren't agreeing on everything with the board and that's one of the reasons that he decided to to step down and um I I think also when when you start thinking and and that's back when he was announcing the the whole conglomerate I think it was at Bitcoin Prague where he was saying hey we're going to have um Strike and we'll have Electron and whatever um kind of merging together. I I I personally wasn't so sure about the the whole synergy of of of these different industry well kind of different operational businesses. So um so to see this this happen at least I personally am happy. On the other hand I will say I'm not a shareholder of 21 because I also saw that based on the news the the stock fell now another uh 10 to 12%. I don't know where we're standing right now, but that's also not super positive obviously on on the short term, but I think on the long term it's definitely a a right position and uh overall um yeah, still big fan of of Jack Mers. I'm happy he's doing it and uh yeah, I don't know what what you guys think about it.

[00:03:56][snorts] >> Yeah, I'll jump I'll I'll jump back in here, Eve. Uh yeah, interesting. I hadn't like really caught the beat on on Twitter on X yet today. Um, it's interesting that that uh you said the uh the response has been positive kind of in in in your follows in some of your circles um from like the more cipher punky crowd. I I get that. I guess um it's it's like a little disappointing and and I think uh 21 shareholders are are probably a little disappointed because the stock traded down 10 12% uh pretty quickly on the news today. Um, you know, and that's that that's an interesting cat which we we might get into that. You know, that stock traded up, you know, on the announcement of of the of Malers's backing this company and Tether backing this company and Soft Bank being behind 21. It traded up, you know, I think 6x from its IPO price pre- merger. Um, then it then, you know, since Bitcoin's price has fallen about 50% from its high, so too has has 21 stock. Um, you know, after they completed their merger in December. But yeah, uh I've got a lot of thoughts about this, still processing it. Um I was really excited to to both cover 21 and and see what they do. the the vision that that Jack kind of pitched as this, you know, Birkshshire Hathway type model um and a Bitcoin core focused business, you know, that was going to spin out Bitcoin operating companies and selectively use M&A and generate cash flows and, you know, do some interesting um you know, mining activity with Electron, maybe some capital markets activity. um maybe not in the preferred model strategy because uh you know Malers has been under fire a little bit recently you know going after Sailor a little bit just asking asking questions as Malers would would say um so there's a tension there between him and and the you know more like leverage Bitcoin equity uh play or the amplified Bitcoin treasury strategy but I I was excited to see him kind of lead this thing because um like you said I'll echo what you said like I'm a fan of Malers's um I think he's a great influencer for the community um and and um for for the broader Bitcoin movement. He comes from a family's background that has, you know, some really real deep uh institutional traditional finance connections. And so I was I was pretty excited to see where what he'd be able to do u bringing Strike public through a potential transaction. But uh that's that's the other part of this news is Strike is um you know, he's going back to Strike just focused on building that and um they're not going to be going public.

[00:06:32]So, we're not going to really get insight onto the profit profitability of that company. I'm certainly wishing him the best. Hope Strike does well. I love love their product personally. Um, and yeah, it'll be be interesting to see like I think, you know, having a guy like Malers heading as CEO of a Bitcoin uh balance sheet company was was really good for the industry, really good for Bitcoin, the asset. Um because I think Malers is a you know even though he does um you know come under fire sometimes or you know there's controversy around him sometimes with things he says I I think he is broadly good for the ecosystem and and just marketing for Bitcoin in general. So uh I'm a little sad on that front. Um but uh what's your takeaway guys? Miller uh just just hopped in. Uh Chase, what do you guys think about about uh Jack being out? Um I did see his announcement. And I I do wonder, you know, I'm not going to speculate. I I I was just cur I I I was going to I was going to get a little spicy and and you know, I wonder if this was purely his decision or if there were really diverging views because because it had been previously announced that that um uh Raphael would would be the president of the the conglomerate. Um so him stepping in kind of makes sense. And I I I do wonder if if the uh uh Jack stepping down was entirely his choice or not um and where where the disconnect was. I I assume we we will probably never know the exact you know where the strategic breakdown came, but but curious um of your guys thoughts.

[00:08:15]>> Uh yeah, I guess I'll jump in. Uh sorry about uh being late everyone. Nice to see you all. Um yeah, it's been a very interesting day I think. Um, obviously like you said, Tyler, um, Jack's a fantastic advocate for the Bitcoin space. He's done some great work over the years and as someone um, younger in the Bitcoin space, so I've learned a lot from him. So, I've got a lot of respect for him despite recent sort of disagreements with him as you've already noted. Um, it the whole thing the silence we saw, there's a lot of speculation on Exel last few months about what is actually going on at 21.

[00:08:51]Obviously, we were all very excited in the treasury space when they announced their sort of plans to be this next Berkshire halfway of the space. Um, so possibly it felt like this was quite almost un an unnatural fit for Jack. Um, coming under a lot of fire for things.

[00:09:08]So, it's good to see him uh at least take the decision himself. um I won't say that uh fully but at least take that decision to step back and focus on what works best for him and building strike um which is a fantastic business in its own right and of course we've seen uh a couple of companies recently announced uh sort of jump into that uh Burkshire halfway sort of framing obviously uh BSDR with Adam back is um eventually going to hopefully lay out his plans u when they get that shareholder vote Um, and also of course, as I'm sure we'll discuss Lynalden's new company.

[00:09:49]Um, so there's lots of exciting moves in the space anyways. Um, and yeah, it'll be interesting to see how 21 um, take things now. Jack's step back. Um, but overall, um, fantastic for Strike as a business to have Jack back fully focused, um, and where he works best. Um and yeah, definitely um need a bit more time to digest things in terms of analytical point of view, but face value, fair enough to him and um it's good to see him being transparent.

[00:10:19]>> Do we know if Strike will still be part of this conglomerate or if Mer's being removed or stepping away as CEO means Strike is no longer part of this deal?

[00:10:30]>> Yeah. Yeah. 21 did announce that that Strike's not going to be part of this deal. Um, yeah, that seemed, you know, Jack Jack, you know, was was listed as a co-founder of 21 as well alongside Tether. Obviously, Tether has, you know, the controlling equity stake and they they bought back even more of that that equity stake from Soft Bank when they exited in May, but uh they did announce that that Strike wouldn't be part of this conglomerate moving forward. Um, so yes, yeah, I've got again speculating, you know, I I I wonder if >> if Jack also got bought out of of 21, but that's all just pure pure speculation at this point.

[00:11:09]>> Yeah. So, it's interesting like the this was kind of a three-headed snake at one point when it was Tether, Soft Bank, and Strike. And that was really what made it seem so compelling in the space. You've got the capital, you've got the massive operators with Tether, and then you've got kind of the the media and consumerf facing brand with Mullers and and you know, we first saw SoftBank pull out, if I'm correct, and now we're seeing 21 pull out. So, yeah, I would say this company is absolutely in some level of disarray. I I would also kind of call out for anybody that is an operator or an entrepreneur that this is a lesson.

[00:11:47]I've been a CEO, founder, and chairman of the board. And I've been CEO, founder, and notchairman of my board.

[00:11:54]And it makes a big difference. I mean, you can take the CEO job and feel super aligned with the board, but a company is, you know, nothing if not a series of pivots and innovations and iterations.

[00:12:09]And so, at a certain point, the board may disagree with a direction that you want to go. uh and if you aren't, you know, feeling like you can wear that on your chest, it's really hard to be a CEO operator of a company if you're, you know, executing on somebody else's idea for the company's future. And so, it is interesting that Mer's put himself in this position in the first place as somebody who clearly takes pride in being the decision maker and kind of a self-s sovereign CEO operator. Um, I think that that will probably be his biggest takeaway, but it should also be kind of just a big takeaway to anybody in the space that wants to work or build Bitcoin businesses. Like if if you think you're passionate about building your business and you're passionate about Bitcoin, all the more reason to just do it in a way where you are the decision maker. And um whenever the CEO co-founder is not like like the way he presented this in his video was that there were disagreements with the board.

[00:13:09]When you have a true CEO founder-led company, there is no disagreements with the board. Like it's a you might have a disagreement in your head as you're playing out scenarios, but then when you act, the company acts. Um, so in some ways I think mers might have just dodged like a four or five year stressful experience by getting out now ahead of you know the spa converting. So you know good luck to Mers and team good luck to what's left of of 21. But you know we take for granted sometimes the self- sovereignty aspect of Bitcoin the protocol and our ability to participate with that. But once you start layering on businesses on top of it, governance is incredibly important. And uh I think that really shined through today. And one last thing is this does to me kind of highlight the benefit of strategy and sailor's team that has been in public markets as a publicly listed entity for 25 plus years. Whereas we have a lot of kind of upstarts, smaller companies trying to go public, trying to spack into the public capital markets and kind of, you know, bumping their shoulders and elbows along the way, figuring out how to operate at that scale and with that level of kind of clarity and governance and alignment. So to me that also shines through a bit today.

[00:14:29]>> Yeah. Yeah, definitely. You know, I this is one I thought I thought it would work out. Um, you know, even even standing on the other side of this with with Malor's out, you know, given I'm sure this like was years in the making because, you know, Malers and and Paulo at Tether, you know, Paulo's the CEO of Tether, of course, for anyone who who who may be living under a rock, but uh um you know, they're they've got a long history together. They're they're um you know, reportedly close friends. So, this is something that I thought um you know, they probably have talked about, teased for years. Um I think it was a really good opportunity for Strike to go public and and you know, that's probably again I'm I this is not this is totally editorial. This is a lot of speculation from my seat. You know, I'm I'm not playing journalist here. I'm you know, I'm sitting on chat with my friends.

[00:15:19]But, you know, I I I think, you know, this was like Malers probably saw this as as a as a big opportunity uh to finally take strike pro public to really get behind the the Bitcoin as money thesis and build a business that not only treasured Bitcoin but built the ecosystem around it. Um and uh you know like obviously with with Tether being the heavy hitters they are um having that company and that that capital and that reputation behind behind you in public markets uh could have gone a long way. And um you know Chase your your points are incredibly valid and and uh you know it's it's better this happened now than a year two years down the line uh once 21 started you know getting more active in public markets. I do I do wonder like where do they go from here?

[00:16:09]What is what is the play? Um you know is Electron just going to be is the mining operation going to be a big part of this? They did reiterate in their press release as well um you know the strategic vision is still um to be the Birkshshire haway of of Bitcoin and to produce you know operating businesses that um you know are cash flow positive and then sweep sweep that money into Bitcoin. That's what Tether does, right?

[00:16:36]you know, they a lot of their backing of of Tether is um with Bitcoin. You know, certainly they they own a lot of treasuries to to back their stable coin because they have to since because of Bitcoin's volatility, but the the play from Tether from the get-go, you know, it's a it's start it's founded and started by Bitcoiners um who, you know, saw an opportunity uh that stable markets, you know, provided and um you know, they're they are operating offshore. So like one thing I speculated at at the beginning of this this announcement last year was like is this is this like Tether onshoring and coming to the US as we saw you know maybe a move towards more regulatory clarity but that seems it seems like I was far off the mark with that. I'm sure Tether's really happy operating offshore under you know a different regulatory environment. So I do wonder you know what what is the strategy from here? Um we've it's been a year, you know, since this announcement and we've been waiting waiting for more and more for 21. Do any of you guys have speculation um on on you know where 21 could go from here? Is it h like how investable is the business? You know, just again sitting from our analysis, you know, our chair without them, you know, having done anything for a year.

[00:17:53][laughter] Is this just a function of the bare market? You know, like I'm sure if it were bull market, maybe maybe things would be different from where we're sitting right now.

[00:18:03]Yeah, that's a that's a very good question and I think this is something that we've been wondering already with 21, but there's also other companies, you know, because they've been moving fairly slow, right? I mean, you look at at a strive, they've been aligned from the get-go. These guys have been like in one big brain basically al all together.

[00:18:22]It's like one big brain. Same as strategy as as Chase pointed out, right?

[00:18:26]They they know exactly where they're going and they're moving extremely fast.

[00:18:30]So this is kind of a precedent to start thinking okay what what other Bitcoin treasuries are moving that slow and is it also due to some maybe clashes between their management and their boards and what's happening on the governance right because that's a very important part and and there you can see how easy a bitcoin treasury and you think oh having a bitcoin treasury is probably one of the easiest play or at least it was in the summer of 2025 but now you can see how easily it can fall apart part right just doesn't take that that much and we've seen many others fall for different reasons but uh the the the short term I think is going to be quite brutal for for 21 at least that's how I see it right now because now they they obviously now have a new leader with Rafael from Micron but um does it have all the support from the Bitcoiners I mean Jack Mers was a very very big p like personality in in the Bitcoin is a bit Bitcoiner and a bit Bitcoin's personality, right? So, you you can't replace that overnight and I think it's going to take a lot of time for 21 to to take the heat and and start showing, hey, we have a strategy that works with what we're planning to do and now it has to do it has to go without Malers and and Strike as well. So, Strike I believe was is also a big company or big company name in the Bitcoin space. So, at least from the Bitcoiner support, I see maybe a little bit of gap now that they need to to uh shorten in order for that to or like a bridge to the Bitcoiners that they probably need to to have. Um, on the Treadfi side, I don't know so much how how well Po and all the Tether guys are already affiliated. I mean, this was also with with the counter guys, right?

[00:20:18]The the Spark. So maybe they also have some some people there. But just in general, at least from from the Bitcoin perspective, I see that they might struggle a bit more than with Malers on board. And uh obviously that's short-term. Who knows midterm and long term? But uh that's a bit how I see it right now.

[00:20:35]I I think one other thing that's worth calling out since this is kind of the Bitcoin treasuries takeover and you know the four of us here we're all very fascinated with how business and corporate entities kind of layer on to the Bitcoin protocol. It's worth calling out that when people criticize buying Bitcoin treasury companies equities, one of the things they call out often is operational or executional risk. And this is very real like uh you know sometimes the conversation shifts to it's too much leverage or it's too much dilution of the common equity and these types of things but at the end of the day those are all just kind of different flavors of operational execution risk.

[00:21:16]And when governance issues like this or the inability or a failed attempt to go public or a change in leadership, all of these things are different various flavors of operational risk that exist with Bitcoin Treasury equities but that do not exist with the Bitcoin protocol.

[00:21:33]And so, you know, that is to me always the biggest warning label that I like to slap when on uh you know, anytime that I'm mentioning purchasing MSTR common equity. Now in in the case of strategy, I think there's much less operational risk because they're a proven publicly listed entity for 25 plus years. So strong track record, strong kind of operational excellence behind the scenes there of of how to kind of operate at that level and and SEC regulations, but also the model is less of an operating business. So one of the things about 21 is that these were all meant to be kind of a conglomerate of different operating companies. So you can kind of think about it as kind of compounding operational risk in that sense. Whereas with strategy, yeah, there's a business intelligence business that's basically just kind of on cruise control. It's hardly even relevant to the market cap of the company these days. And the real risk of the company is just are they pulling the right lever at the right time based on their internal models. And to me, that is kind of the optimal mix of limited operational risk while still benefiting from a business layer two on top of Bitcoin. Whereas I think the the flaw in the 21 capital and the risk that I see to something like Lyn Alden's new orange juice is that you are layering on operational execution risk that you know yeah maybe there's incredible value if it works to using free cash flow to buy Bitcoin instead of you know diluting common equity or taking on dividend obligations with preferred etc. But that operational risk is like what makes it so that 99% of startups fail. It's it's the operational part. It's not that they have dollars in their treasury or they raised capital and it diluted their company by 25% in their seed round instead of 15%. That's not what kills startups. It's the operational uh lift.

[00:23:38]It's really hard to run a company especially if there's not alignment on governance and kind of a clear founder decision maker. So, uh, operational risk like this to me is the day that Bitcoin treasuries takeover should remind people like yes, you're taking on operational risk. Some of these Bitcoin treasury companies have more operational risk than others. And that should honestly be one of the things that is a much bigger part of the conversation instead of just like Bitcoin yield or Bitcoin per share day-to-day.

[00:24:10]>> Yeah, massively agree with you there, Chase. Overall, um there's not much more for me to say by sort of building off of Chase, what Chase was saying. I think that is something we really overlook. Um is well, what are the the cons of buying treasuries as opposed to just your cold storage Bitcoin? Of course, uh, treasuries have that that level of ownership risk which Bitcoin doesn't have. And that's that's often one of the big reasons why we love Bitcoin as as an investment. It can't be destroyed by um a random press release by potentially a CEO stepping down, etc. And I think we've really seen the the effect and the risk of that today and probably um I agree with the other points made, but we'll probably see it in the in the near future. I think when I last checked a couple minutes ago, um 21 Capital was down about 11 and a half percent today.

[00:24:58]So, we're really seeing the effects of it now and I can really only see that keep going. I think probably the best thing to happen for 21 right now is for the new management, the new CEOs to come out very quickly with a sort of new a new vision, a new plan, which is um sort of setting out the foundations and the pillars of the company now before the the market sort of takes too much control over the narrative. Um so yeah, overall um Chase really really think that's a great point there in terms of um that ownership risk we do take on investing in treasuries and something everyone should be aware of.

[00:25:33]>> Yep. Yeah, I think well said. Um you did touch on uh um Chase Orange juice which is you know some fresh news we also got this week freshly squeezed but [snorts] um which is a a uh another conglomerate type uh Bitcoin treasury company if you will again um with with that comes with operating risk like you you guys outlined. Um, so Lyn Alden's backing this um, author of Broken Money as a, you know, I've usually got her book on display here. Great book. Uh, she's a great influencer and analyst I think not only in Bitcoin but in the macro space in general. And, um, yeah, so she she's co-founded this. They're they're planning to acquire cash flowing businesses, support operations, um, and then back those cash a portion of those cash flows into a Bitcoin treasury. I think you need scale for you know a company like this to work and operators who are really good at you know building a conglomerate building a portfolio like there's a reason Birkshshire or Hathaway is you know unparalleled you know they don't have real rivals there's there's a few um you know other conglomerate companies out there doing similar similar things but they've usually got like a a really long track record and massive massive uh capital at their disposal. Um so so that was announced uh just just this past week. Um and it does it's being seated um with with money from Ricardo Selenus who's a uh you know famously a a Mexican billionaire who he's he's talked in the past about his his bit his allocation to Bitcoin and Bitcoin companies being you know 70 80% of his entire net worth. So he's a he's a re like he's he's certainly a Bitcoin maximalist and and I think uh you know a great spokesman for for the uh you know proposition of Bitcoin as an alternative to fiat um and just better money. Um so yeah there there's $40 million in initial funding behind that. Um interestingly Selenus does have like experience in this. He um you know he he headed a company or still still heads a company in in um Mexico that that has been really successful a multi-billion dollar um company that does have many operating businesses in media. I I think there was a radio company TV company as as part of their portfolio and seemingly has has uh produced uh you know solid cash flows over the years. Um but yeah I just wonder about scale. Um obviously we don't have a lot of info into what exactly the initial investments might be uh with the seed money. You know Lyn Alden does have um some experience in the in the VC world. Ricardo Selenas obviously has has has money uh backing you know startups and and uh you know series B series C funding for for you know later stage companies. So, um, he, uh, one of the quotes I'm just pulling up from from our the Bitcoin Treasury's tweet, uh, Ricardo said, "I've learned two things. Cash flow is king, and you cannot count on governments to protect the value of your money. That's why I'm backing this team." So, yeah, it'll be interesting to see um, what Orange Juice does. And and uh, Eve, I'll pass it over to you. Do you have thoughts on this? I mean, um, it's certainly interesting. I I think we all love Lynn Alden and her work and uh um yeah, it'll be be uh be I I think fun to monitor uh what what this company turns into.

[00:29:15]>> Yeah, I mean it was also an interesting news when it came out at least for me because yeah, we we've well we're starting to have a new entrance now again on the the Bitcoin Treasury side, right? Despite the the bare market or are we getting into a bull market?

[00:29:30]Question mark here. Uh yeah. So, so it's it's great to see that that there's again some interest and and looks like they they're they've been monitoring the the Bitcoin treasury space because they seem to very or they seem to emphasize a lot on on this cash flowing, right, and the operating business and the the need for that. And um I I have to say I'm a big fan of of Lin Alden, Jeff Booth, Nikoluga with what they were doing already at Egoath. I'm super excited to see what they come up here with with orange juice. But the the question mark and this something goes back into what we were talking before, right? Is that now you're looking at potentially having many different operating businesses under one umbrella, right? And it's not the same as saying, "Hey, we we have our digital credit and BIA um business like strategy does or or you just have your kind of more asset manager and digital credit like Strive has, right? So suddenly like you here and and it seems like they will be acquiring quite a lot of small businesses because they mentioned that they will be looking at 1 million to 10 million annual cash flow or around that range, right? businesses. So that tells me that they're probably looking to acquire somewhere between what between four to 40 depending on on on the price.

[00:30:52]I don't know. But regardless, it seems that they don't have a specific direction as well. So it could be anything, right? Um and and if you diversify a lot, we've been talking a lot of about Barkshshire Hardway, but uh there's also some other companies that were doing that and that didn't work out so well at least um like if you think of of GE, you know, the the big conglomerate, right? They had to split up uh recently as well. So, so it's it's not always like the successful story. So we will also need to remind that there are risks with having uh different types of of businesses especially if they're very diversified. Um I think people need to to be a bit more uh yeah specialist in in what they're doing right so that's that's one of the things and interestingly I think one of the the themes of of this talk and and one of my latest talks also with with Adrien Morris is uh operating business.

[00:31:48]We're in the depth of bare market. I think that's that's definitely something that's that's interesting and um would love to to have your thoughts as well on on on this because uh potentially we could see a resurgence also not just on orange juice and obviously we're talking about 21 before but potentially strategy as well right what if they push a bit more their BI AI uh business and and that's something I would be really keen to to hear your thoughts on >> I I don't think anybody cares about strategies BI business and I think Sailor has kind of made that clear. He's talked about how he used to do the rounds for 6 months a year flying all over the place talking to people about the BI business and you know nobody cared and then he got into Bitcoin and now they're one of the most well-known, most liquid, most traded stocks in the world. So I I I don't think there's really any looking back there. I think they've tried that for 25 years and they've tried this new thing for the last five and it's pretty clear where the media product market fit is in terms of being able to capture the world's attention. And to that point, we see this educational hurdle with Bitcoin Treasuries, the equities, and and that's what we do here on this show and and what Bitcoin Treasuries.net tries to bring to life with the data and the metrics on their dashboards. there's an educational hurdle in trying to explain Bitcoin. Like we know that hurdle. Most of us here we've we've overcome it, but we know that that's like a multi-year process. And then to really dive into Bitcoin treasuries, just the simple kind of carry trade type treasuries, that's another huge educational hurdle. What scares me about something like Orange Juice is the educational hurdle of asking people to try to do research on the individual companies inside of that conglomerate. Because if you're going to buy that ticker, you want to have a sense that you've done your homework on at least 90% of the companies that are made up inside of it. And if those are all in various different industries and different sizes run by different leaders, that's like a terrifying educational hurdle to overcome um in in terms of like trying to get investor participation and clarity and conviction amongst that investor base to buy and hold for the long term. And then another thing that um comes up and maybe this is like something I can bring to bear in this conversation is the what I kind of refer to as founder flight. So if Lynn and team acquire a small private company, well now they are kind of the governing body similar to what we were talking about at the top of the show with kind of Tether being in charge of Strike in that scenario. If that were if that deal were to have come together, well, that's the next thing you see is founder flight because now the founder is kind of taking marching orders from the top. They're no longer feeling the passion and the love for the business building that they once did. They've kind of already had their liquidity event or at least a clear path to the liquidity event over vesting. And so you tend to see founder flight. And if if we've learned anything from kind of the the tech era here, it is that founder-led businesses are much more successful in that the day the founder leaves is kind of the day that the business starts dying. And that is another concern with this type of business model where you take successful private companies and you add them to a large conglomerate and they get that liquidity event. And then last but not least, the the concern here is it's just not an infinitely scalable model. Like Lynn is limited by the number of incredible operators that uh her and team have on hand, limited by the number of great businesses out there that either want to be acquired in this rather than staying private, which is just a solid outcome in its own right.

[00:35:36]Um and so that to me is like a huge difference between this type of M&A versus strategies M&A. So strategy is in the business of M&A. But what they like to say is we have this infinitely acquirable good called Bitcoin that we can buy at any size and does not increase like operational risk with each new M&A transaction. Um whereas in this scenario, yeah, maybe these companies have some Bitcoin on the balance sheet.

[00:36:03]I don't know if that's even part of the the M&A targeting here. Um but you you just can't just go around buying operating businesses all day long because if we think about dilution in terms of strategy if they make a dilutive transaction to Bitcoin per share one week okay they you know that that is a known outcome but if you acquire let's call it five businesses per year small private companies like this but every year one of those goes bust have you undone done all of the things that make holding your equity more accretive or potentially more outperforming than just holding Bitcoin itself. You know, with strategy, you don't really have that. It's one entity and it holds Bitcoin and nothing dies on the balance sheet over time. But if you're creating a conglomerate of small privately, previously privately held operating businesses, you should bake into that that maybe once every five years, one of those companies gets killed by AI or a competitor or has keyman risk and the founder leaves and and a bunch of the key founding team members and staff leave with it and the company kind of gets put on ice or has to be sold off for parts. So I I just think there's so much it to me it's like layer on layer of operating risk that even though strategy is an operating company, you just don't see that they've removed those types of operating risk.

[00:37:29]>> Yeah. Yeah. I think it's a really good point too about the types of companies that they're going to be targeting. They said, I'm just just taking a look at the article here on the website, um, they said they're going to be targeting stable businesses that are generating one to10 million in annual free cash flow. And like you said, the private companies that are doing that, um, you know, you you've got to find a perfect storm. You know, they're they're few and far between. And the ones that are willing to get acquired that have a stable business that can operate either without its founder or with its founder remaining engaged and motivated after they get, you know, have this liquidity event and and are suddenly [laughter] far more rich than than they were, you know, the day before. So, yeah, I think that's a that's definitely a risk. And I do just like I think from the invisibility side of this thing, you know, they've said they're they're going to to look to look to go public starting a you know, private at first here, but I I assume it's going to be a a spa deal.

[00:38:30]Um if I if I had to speculate rather than an IPO just due to the cost of of that um you know, for such a small company. Um but yeah, for investibility, you've got to be really sold on the team behind this, right? And yeah, Bitcoiners love Lyn Alden. Um, I think she's extremely intelligent. She knows Bitcoin, certainly knows the the value prop of a Bitcoin balance sheet. Like I said, she's she's had some some VC uh background. I I you know, I can't speak one way or the other to the success of of Ego death, but uh you know, just assuming they they've been successful.

[00:39:05]Um, you know, maybe the investor is really excited by, you know, Ricardo Selenus being, you know, backing this company as well, right? You know, I I think anytime you're talking about a company that's smaller in scale on the Bitcoin treasury front, um, you know, the value prop is, you know, hey, what's the difference between just buying spot Bitcoin or buying strategy if I want Bitcoin type exposure? um and and a conglomerate type company like this, you've got to really, like you said, if you're if if you're able to do the due diligence behind all these businesses, great. And you have uh you know, confidence uh that they're going to generate a lot of cash flow. I I just yeah, I I do wonder about the scale, you know, $40 million to start in in in capital. Um what what's the upside on that type of thing? And it it could be could be sky-high. Um they could be really good at this. Um but but you're really investing in the team, right? It's it's less about the actual um yeah, I guess it's it's less about the type of company they are and that they're like kind of unique in the Bitcoin space um in going to public markets with this with this strategy, but it's really investing in the team if if if u you know you're looking to to allocate money to this in public markets.

[00:40:32]>> Yeah. Well, it's still early days of course. There's so much to clarify um going forward. Um lots of innovative stuff here. Um obviously with that innovation, with that sort of forward-looking perspective as we've already discussed in uh today's chat, there's that massive operational risk um in terms of at the moment obviously there's a lack of clarity like I said.

[00:40:53]So, okay, how are they going to do this?

[00:40:55]For example, I'm looking at the article now. I've been having a little scroll through it as we've been discussing. um they've sort of uh discussed about how different uh market conditions they're going to focus more on um the business side of things and then more on the Bitcoin side of things. Well, question is how easy is it to shift between that?

[00:41:14]How easy is it is it to to sort of invest in businesses in the long term as they've um said in that Berkshire halfway sort of model but then be able to react flexibly in the short term to market conditions. Um I think there's a lot of questions still to be had. Of course, um fantastic uh founding team in terms of the names we know. Um but at the moment yeah a lot a lot left to have a look at and I think sort of going forward um in terms of looking at the wider ecosystem I feel like on the point of strategy I feel like strategy of their first mover advantage really um have quite a unique position where that core operating business doesn't really account for much like we've already said because at least in my opinion strategies business is capital markets now like they are the company which creates Um, of course, innovation through capital markets. And I I like to sort of look at them as this Levi Leviathan company in a way where they are the dominant company in capital markets. They can innovate. Look how easy they um could raise cash for example by selling their stock. How they could just sell Bitcoin onto the market and it not really have an impact. Like they've got the flexibility now because they've got that first mover advantage which then obviously gives them the size. So I guess that's the sort of way I'm looking at strategy going forward.

[00:42:34]I'd uh see them sort of just remaining dominant because of that position they're already in in terms of well will they expand their operating business?

[00:42:42]What can happen maybe um and it would be really cool to see um because obviously as they grow as a company as Bitcoin returns um in terms of the sentiment etc. It'd be cool to see if there's more of a I guess focus put on the the core operating company alongside the Bitcoin treasury. Um, but overall, um, I think in terms of, uh, the treasure itself, um, and Lynn's company, I think there's, as I've said, lots to clarify, lots to get through. Um, but I'm sure we'll we'll hear from that in the future.

[00:43:12]>> Yeah, definitely. Before we wrap here, we're we're coming up against the top of the hour, but, uh, we've got to talk strategy a little bit more. Um, this week, um, same thing. Uh, like like you said, Miller, they they sold their stock. Their stock's been up this week.

[00:43:28]They raised $263 million. So, let's see where that puts us. They're at 22 months of dividend coverage. Coming up close to that magical number of of two years of dividend coverage that uh a lot of us have speculated might be right. Chase says double that, make it four years, get through a whole cycle with uh you know cash on the balance sheet. Um um but yeah, what what do you guys make of of strategy uh pausing the Bitcoin buying still and stacking cash? I mean, we've talked about it at length, maybe maybe ad nauseium. Um but uh yeah, 22 months of of dividend coverage. Um Michael Sailor heard heard the feedback, listened to the markets, and and uh is rebuilding that that cash fortress.

[00:44:23]Yeah, I think not not much new to say, but I think uh it's it's all about again getting STRC back to par, right? And if adding to the cash reserve helps, then they should definitely go for it. And yeah, apparently they're going to keep raising and and see how the market reacts as well. I think on the news yesterday uh STRC went up a little bit same as as MSTR but uh I think it's also due to to Bitcoin prices also going up so hard to tell but it looks like in general the market is taking it well when strategy is still raising the the cash reserve and question will be what to watch until which threshold will it be enough right because I think at some point it becomes also detrimental not only to the shareholders but to the whole operations to just have way too much cash. But uh again, these are my thoughts. I know Chase, as you pointed out, likes a lot more cash. So, yeah.

[00:45:23]Tyler, can you go back to strategy.com for a second, the dashboard there?

[00:45:28]Yeah. So, so here's what I think is interesting and kind of highlights um in a day like today how much nuance there is in the model itself yet how little nuance there is in the discussion online about this company. So for example, you've got strategy which diluted according to you know bears or naysayers diluted MSTR common to raise cash yet MSTR common is up and their MNAV expanded. So how does that make sense in according to the bare thesis where you know MSTR shareholders are taking the hit for all of these types of transactions? What makes sense is because the shareholders do still have exposure to that cash that was raised. Now, yes, would MSTR shareholders prefer being exposed to Bitcoin, the appreciating asset over cash, the deprec the depreciating debasing asset? Yes, of course. But they do still have exposure to that value on the balance sheet. And that that value on the balance sheet is one of the three things that the S&P credit roadmap uh provided to strategy to improve their credit rating was given. And just to reiterate those things, it was improve dollar liquidity, which we're seeing them do by increasing their USD reserve to all-time highs, reduce their reliance and existing converts, which they did by retiring uh a trunch of converts, and whether or not strategy would have access to capital markets in moments of stress, aka a Bitcoin bare market. Check, check, check. Yeah. So like guys, this is th they're just following. It's like they have a homework assignment. Okay, you're given a homework assignment strategy. Go prove to us that you can improve dollar liquidity, reduce reliance on the converts and maintain access to capital markets in moment moments of stress.

[00:47:28]Check, check, check. Like if you don't think that strategy is a stronger company coming out of this bare market, then I I mean we're just not looking at the same company. And if you really think that the company, you know, issuing shares to raise $260 million of cash, that that is somehow only dilutive to MSTR shareholders as opposed to MSTR shareholders still having exposure to that cash that was raised like basically one for one. if not better because of the premium to MNAV. Like look look at today. MSTR price is up, the MNAV is up, and the credit quality of the company is stronger than ever. while they go line for line addressing the concerns that the S&P needs to see before providing them with better credit ratings, which increases their ability to access pools of capital, which increases the amount of money that they're able to raise to buy Bitcoin, which increases the amount of money going into the Bitcoin market, which increases the scarcity, which increases price. Like, this whole thing is really just pointed in one direction.

[00:48:38]It's built to survive the bear and outperform in the bull. and naysayers can run their victory laps right now, but it's I would say it's a very dangerous prospect to be betting against strategy going into the next 24 months.

[00:48:54]>> Yeah. Yeah. You know, this this just this basic chart of strategies price versus their volume just has me so bullish. And you know, not to beat a dead horse, but like we I've talked about it a lot and and and you just alluded to it as well, Chase. I mean, the fact that they've been able to keep this volume up um through the bare market, you you just see like, yeah, hasn't had the major spikes that you saw in 2024 and 2025, you know, peak bull market or or you're, you know, on the other end of a huge rip in in Bitcoin's price. Um, if you're a bear sitting there and looking at this chart, I I just got to wonder like these these guys are have probably been perma Tesla bears as well, right? you know, and just don't understand uh the power of volatility in capital markets and the ability um to raise money to attract capital. Um yeah, it's super bullish. Um obviously, you know, Bitcoin's price was down 33%, strategy was down 50% in in the last couple months, but um yeah, that's because it was the end of the world and SDRC suddenly couldn't raise $2 billion in two days. um which we know um it's just going to keep coming back as the balance sheet grows stronger as they improve their credit quality not only in the eyes of of rating agencies but investors you know at large in the marketplace institutional investors so uh really bullish um they're part of the the NASDAQ 100 there's going to be a permanent bid on the stock permanent volatility baked in not to mention you know when Bitcoin runs either way um there's going to be a a lot more shares traded. Super bullish. Thanks, guys. Uh we ran over our time a little bit, but thanks to everybody who who uh you know, popped in the chat um watching on YouTube and X. Make sure you subscribe.

[00:50:41]Um follow Bitcoin Treasuries. Follow all these guys on on Twitter. They're tagged in the video and on the tweet as well.

[00:50:48]And um leave a comment. Um share this with somebody. and we'll see you next week on the Bitcoin Treasury.