MSTR WILL BE WORTH TRILLIONS - SHAREHOLDERS ARE THE NEW ELITE

Added: 2026-05-25

[00:00:00]Good day everyone. My name is Adam Livingston and I am the Bitcoin wizard.

[00:00:03]We're going to be talking about why strategy will be the most valuable company in the world. Today I have 37 slides of today's presentation. Happy Memorial Day weekend. I don't take days off because I'm addicted. I think the bears are absolutely ridiculous. Bitcoin is going to win because it has to. And strategy clearly cannot be caught. This company has the biggest Bitcoin hoarde by far. 843,000 or so Bitcoin. Nobody will ever catch them. Everybody is building the staircase beneath Sailor.

[00:00:35]We are going to get into why today's strategy will be worth trillions of dollars. There is zero doubt in my mind and why MSTR shareholders are the new wealthy financial elite. There's not a lot of time to waste today because there's a lot to get into. If you could do me a favor and hit the like button and subscribe to the channel on YouTube, that way you can support me spreading the orange gospel of Bitcoin, of strategy, of digital credit to the masses. And before we get into it today, really want to take a brief moment to thank Horizon for sponsoring this video.

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[00:01:39]So, what is the entire MSTR thesis in one sentence? If you don't want to complicate it, it's very simple.

[00:01:45]strategy can become a trillion dollar company because MSTR common shareholders they own a leveraged residual claim on a growing Bitcoin balance sheet. Very simple. The company is capitalized on digital scarcity. Bitcoin is the asset that's on the balance sheet appreciating over time. Thankfully appreciating because the United States dollar is a melting candlestick. Now the claims on the balance sheet obviously there are preferred equities as well. STRC is the big one. Over $10 billion of STRC issued. Those are dollar denominated claims. Obviously, the cost of carrying that preferred claim on the balance sheet is the 11.5% yield. Some of the preps have fixed dividends. Stretch is actually variable, not quite fixed. But the result is as Bitcoin rises, those claims, those aren't compounding, are they? No, they're not. If you pay 11.5% or less or even more, what you owe is not compounding. And that's the gloriousness of this model. It's very simple. Buy Bitcoin. The asset that compounds hopefully goes up 20 to 30% a year. And then you're just paying an 11.5% dividend. So imagine if Strategy issues a billion dollars of stretch today. Well, guess what? They owe 11.5% per year on that $1 billion. But who knows? Maybe there's a perceived less risk later on down the road. Maybe rates get cut so they can lower the dividend.

[00:03:09]What if you could pay 4% on that outstanding stretch 10 years down the road perhaps? And while Bitcoin is compounding at 20, 30, 40% per year for the next decade or two, you can start to see why this model captures a lot of wealth. This is the current snapshot.

[00:03:27]843,000 Bitcoin. Their enterprise value is $77.7 billion. the debt $8.25 billion that will probably be reported as being less on Monday considering they are retiring the convertible debt. They are lessening the debt load of the company which is fantastic. They are shifting to the preferred stock model $15.5 billion of preferred stock that is taking off dramatically stretches growth is nuts from 0 to10 billion in 9 or 10 months. Crazy growth of the preferred model and they had the 2.25 $25 billion in cash. So basically, you got to sum up all of the senior claims. Add up the debt, add up the senior preferred stock to the common MSTR stock, then you would subtract the cash reserve. You have 21.483 billion in the net senior claims. It seems like you're dragging down the balance sheet. Is this a bad thing? If you're an MSTR shareholder, no, it is not because the key metric is the common equity Bitcoin exposure. Bitcoin per share does not tell you the entire story. No, it does not. CEBE will actually tell you how much Bitcoin the common shareholder zone after the debt, after the preferreds, and of course after the cash is accounted for. So basically, if you issue stretch shares, you're adding a senior claim in terms of liquidation preference. And then there's the cost of carrying the claim on the balance sheet, which is the dividend that you have to pay out to the stretch holders. Add that into the math somewhere. You can't just count that as Bitcoin per share in some vacuum. Does the preferred stock model work for MSTR shareholders? Yes, if Bitcoin goes up over time, and you're going to see why.

[00:05:08]But we're not talking Bitcoin per share because that overstates what you control as a common stock shareholder. We're talking CEBE, common equity, Bitcoin exposure, what you actually own. So, if you're taking inventory of what you own as a shareholder, really simple. Well, if you look at the total Bitcoin per share without adjusting for the senior claims, you're at 239,931 sats per share. But in the common equity Bitcoin exposure, you actually only own 159,351 sats per share. Quite the difference.

[00:05:41]So, we refer to this as the senior claim drag that's on the balance sheet. There is 33.6% of gross Bitcoin exposure. it's consumed by those senior claims with the debt with the preferred stock on the balance sheet today. So you actually don't own all of the Bitcoin if you're an MSTR shareholder. That's not the right way of looking at things. So an interesting way to frame it is that you can take the dollar senior claim that $21.48 billion and you can look at that in Bitcoin given today's Bitcoin price. If you look at strategies Bitcoin stack, that means that 283,367 Bitcoin are the senior claim Bitcoin.

[00:06:21]You are not exposed to the economic value of that yet. But a funny thing happens when Bitcoin goes up because remember Bitcoin is compounding, but the yield that's paid out, the preferred claim that's on the balance sheet, that's not going anywhere. That's not compounding. So what happens is that when Bitcoin goes up, let's say to 459,000, which I'm projecting to be my 2030 median Bitcoin price using some bearish assumptions we're going to get into. But this is what happens. There's a compression in the senior claims because when the Bitcoin value goes up, but the preferred claims stay fixed, that means the common shareholders get a bigger piece of the pie because the Bitcoin is going up. The value increases, the claim is staying fixed. you get an outsized claim on the value of the bitcoin as bitcoin goes up. That is how amplification works. It is a beautiful model assuming that bitcoin goes up into the right. So this is the hidden convexity behind this that compression of 236,622 bitcoin at 459k per coin. That represents almost $ 109 billion of economic value which is more than strategy's entire market cap. in fact about double strategies market cap today and that's generated purely from the compression of those senior claims that are on the balance sheet today that is zero new bitcoin required and obviously sailor and strategy they buy bitcoin handover fist almost every single week throughout the year so this is what happens this economic value it is acred to the mstr shareholders when bitcoin goes up that is what the latent power of that amplification is doing for for the MSTR shareholders when Bitcoin goes up.

[00:08:06]$ 109 billion of economic value created.

[00:08:10]That's double Strategy's current market cap, which is nuts when you start to see where this can go. So, you might be saying, "Adam, this sounds terrific.

[00:08:17]This sounds great, but Bitcoin needs to go up and Bitcoin is not doing too hot lately. I am getting sad. I'm getting emotional. Help me. I'm in depression."

[00:08:26]But when you control for the long-term trajectory of Bitcoin, especially by looking at it through the lens of Bitcoin's 4-year moving average, it goes up and to the right. That's correct. You have people absolutely losing their minds over the spot price of Bitcoin.

[00:08:43]And I just got to say, for the love of God, will you relax? Look at the 4-year moving average. It literally just goes up. You can stretch the moving average to get rid of all that spot volatility and it only goes up and to the right.

[00:08:56]Bitcoin is a step function. If you can't hold it for 4 years, you need to stop whining like a prissy little girl. It's going up to the right forever. Laura, look at this. It's unbelievable. So, we are slightly above that 4-year moving average line. Not by a lot. You saw that it ended at about 59,000 60,000 right now. We're sitting at about 75K. So essentially where we're at, we are 1.26x the 4year moving average. So the historical median multiple is 1.87 times the 4-year moving average. We're currently at 1.26.

[00:09:34]So we are far below trend. Can Bitcoin fall further from here? Yes, absolutely it can. But it can't fall a lot further.

[00:09:42]50k Bitcoin would be like an FTX level event where you're deviating from the trend. 35k Bitcoin is total nonsense, but that is the trend. Bitcoin is historically cheap right now. If you would have only bought during this level of valuation according to the trend, you would be a very wealthy individual. So, let's just have a quick 4-year time frame since we're looking at a 4-year moving average. Okay. Now, obviously, it is true that Bitcoin's compound annual growth rate seems to be decelerating.

[00:10:11]That actually makes a lot of sense for any asset that grows with a power law.

[00:10:16]That's correct. If there's a power law growth function of the asset rather than having some exponential base, you are going to see deceleration in the compound annual growth rate. There is no getting around that. So, what have I done for my model? I'm actually assuming that each 4-year moving average growth year-over-year, the Kager drops by 5% every single year. Okay, 5% every single year. somewhat aggressive, but I'm just trying to project out what maybe a 2030 median Bitcoin price is. And that brings us to the floor model being a 245,000 Bitcoin price and the median situation.

[00:10:53]Remember the median trend line, the long-term median trend line of the asset that gets us to 459,000 Bitcoin 4 years from now. And the average, which would be the mean, that would be 569,000 Bitcoin. So, these are the multiples on that 4-year moving average. The median case is not the bull case. That's simply Bitcoin trading at its long-term average relative to the trend. And this is where it starts to get fun because if they hold $64 billion of Bitcoin today, the floor case without them buying another Bitcoin, this is just the balance sheet they have now. They don't even have to buy another Bitcoin. No new stretch issuance, no new debt. I know they're moving away from that, but literally just given their balance sheet today, the floor case of their balance sheet with no Bitcoin purchased over the next four years, that's $27 billion. The median case, remember, median case with a decelerating Bitcoin growth rate and they don't have any additional Bitcoin purchased over the next four years.

[00:11:54]That's a $388 billion balance sheet. And then in the mean case, the average, that's a $481 billion Bitcoin balance sheet. So what does that math tell you?

[00:12:05]That median case tells you that the current Bitcoin stack alone, the current stack becomes worth more than five times the entire enterprise value of the company right now. It's about to get wild. And this is cool because this is like literally requiring zero additional Bitcoin accumulation, zero future capital markets activity, zero sailor wizardry or any other Bitcoin podcast that he would have to appear on. It's literally just Bitcoin returning back to its historical median valuation relative to that 4-year moving average. This is zero new Bitcoin bought and their enterprise value is going to 5x from today in four years. It's crazy. Now under that median scenario here, the CEBE projection is going to tell us, okay, obviously the claims are going to compress over time. That is what that looks like. This light shade of orange right here with Bitcoin moving up, it's going to greatly decelerate with that increased Bitcoin price. So the drag that's on the balance sheet right now goes from 33.6% to 5.5% with that median Bitcoin price. A lot of people talk about MNAV, the enterprise value or the basic MNAV. I like to look at the CEBENAV.

[00:13:17]How much is the stock trading at a multiple above the common equity Bitcoin exposure? That to me is a much more useful number. It's 1.32X as of today. That is our real MNAB when we're just looking at the common equity Bitcoin exposure. So assuming that multiple stays the same, this is where it starts to get fun. The projected CEBE nav is $366 billion at a 2x multiple, which is possible because actually as trading at really close to a 2x right now and Bitcoin is super cheap still relative to the long-term trend. So maybe we get a higher multiple, but that would even mean a $732 billion market cap in 4 years. And then at a 3x multiple, that's a $1 trillion market cap. And remember, this is no new Bitcoin. So, we're reaching the trillion dollar market cap potential in four to five to 6 years, maybe depending on where the multiple is with zero new Bitcoin purchased. And you guys know that they can add more senior claims that supports more common stock issuance as well. They can sell more MSTR to DLE whenever they need to because of that demand for the leverage Bitcoin exposure. I don't think that's going anywhere. So, now it starts to click in your head. Oh my gosh, the Bitcoin wizard was correct all along. This is going to be a company worth trillions of dollars literally in the next 5 to 10 years. Yeah, the 2030s are going to be epic for the MSTR shareholders. Those are your conditions. It's not hard.

[00:14:48]Condition number one, Bitcoin goes to the median 459,000 with a decelerating kagger. strategy buys zero Bitcoin from today, which is hilarious, and then trading at a 3x multiple, maybe on a Bitcoin upswing if there's some cycle top. Do I think it's going to get there on its own with no Bitcoin crazy movement? No, I don't necessarily, but I'm just showing you like that's like a bare minimum path to a $1 trillion market cap. And if you actually look at the basic shares outstanding today, that gets you $3,125 per share with CEBE. So that's a bit interesting. Now obviously are they going to sell more MSTR? Yes, absolutely. Will it be accretive in CEBE terms over time? Yes, given that Bitcoin always goes up. So I think MSTR's returns are going to be absolutely ridiculous because the claims are going to compress. The MSTR shareholders get that additional economic value of the Bitcoin and then you get to play Scrooge McDuck with the cash in your hot tub. So obviously they have a monopoly on digital credit essentially. Obviously SATA is going to dominate. But when you look at the risk profile strategy has the Bitcoin fortress. So their cost of capital is less. They just continue to issue stretch pay that 11.5% lower over time which is even better because you add torque to the balance sheet. That way you get to capture more of a spread between the Bitcoin growth rate and the dividend rate of STRC. Buy Bitcoin and then you just let Bitcoin appreciate.

[00:16:19]And also, you're actually driving up the price of Bitcoin by issuing Stretch and MSTR. So, how cool is that? You're literally driving up the value of the asset, which increases your borrowing terms, which increases your terms to actually issue digital credit, which actually increases your ability to issue common stock. And all three of those things let you bid up Bitcoin. It's a self-reinforcing flywheel. That's pretty much the greatest speculative attack on fiat ever constructed. And then there you go. you MSTR shareholders like myself, I don't own STRC. I want the hyper mega growth. We get to capture that upside spread and that's where it becomes glorious. We ride the orange rocket to Valhalla. So, when it comes to watching what MSTR does with this balance sheet, I will be looking at CEBE from now on. Obviously, it's kind of a static snapshot of what has happened looking backward, but if CEB per share increase, that means you get more common equity Bitcoin exposure. That's a great thing. But the reality is is that if you're adding drag on the balance sheet, you're adding the method of amplification by issuing preferred stock, Bitcoin needs to go up for that method to work for the common stock shareholders. You can't keep weighing down the balance sheet, making the capital structure heavy. You need Bitcoin to outrun those claims, which is fine cuz Bitcoin is going to go up forever. I'm not too worried about it.

[00:17:37]But to me, that is the true math of the accretive delution. and they don't need to issue equity for any other reason than to convert the market premium into Bitcoin. Hopefully that works out for the MSTR shareholders. They'll never be issuing at a poor valuation. I don't think they'll ever have to because of how amazing Stretch is, but you never know. We'll see what happens. But I'm hyper gigabullish. So, this is their toolkit. This is their full capital markets machine here. They have the common equity issuance. They can sell MSTR shares at a premium to the CEBE nav and buy Bitcoin. That's accretive to the shareholders. Obviously, you can issue preferred shares if you want. And then the common captures the long-term spread between the Bitcoin growth rate and that yield that's paying out. Convertible debt that is actually going away. These are going to be equitized into shares or purchased back from the bond holders.

[00:18:23]But that was a great way to get billion dollars worth of Bitcoin. Yes. Did it provide shortselling delta hedging on the MSTR stock? Yes. Will it be worth it in the long run? Absolutely. And there's just going to be a huge liquidity advantage here between the MSTR stock obviously which is super hyperlquid. You can get in and out of that whenever you want to. But obviously the liquidity advantage with STRC is totally unheard of. A preferred stock that trades at probably I don't know the exact number but 100x the liquidity of every other strategy prep let alone all of the other preferred stocks from you know the traditional banks out there. So on and so forth. But clearly with both of their two instruments, that hybrid mechanism of MSTR stretch issuance, they have efficient capital markets access even in this massive Bitcoin draw down. So I don't think anybody's prepared for what this is going to look like, you know, when Bitcoin really starts to run. So let's look at five capital market scenarios briefly here. All of them are still using that same terminal Bitcoin median price of 459,000. So number one, we already talked about my static case a little bit, right? No Bitcoin purchases.

[00:19:28]Now, the conservative case, let's say they only issue $5 billion of stretch per year plus 1% common issuance per year. That's hilariously pathetic. The median engine almost doesn't even make sense because that's $10 billion of stretch per year and they've already done that. Yes, that does factor in the IPO pricing discount where they were able to raise money pretty easily, but even then only 2% common issuance per year. Get out of here. They're going to do more than that. So, let's look at the aggressive and the war machine scenarios. Okay. Uh $20 billion of stretch per year. And then the war machine scenario of $35 billion of stretch per year and 4% common issuance.

[00:20:07]Let's see what this does. Because remember even that static case that produced a trillion dollar outcome for us. Yes, a trillion dollar company from that static case. So let's see what these numbers tell us. So under the aggressive scenario, they get to 1.46 million Bitcoin. The funny part is that I think they're going to have this probably next year, let alone four years from now, but we'll see what happens.

[00:20:30]The war machine scenario gets them just under 2 million Bitcoin. I think they'll have that probably a lot sooner as well.

[00:20:36]But this is what we're looking at.

[00:20:37]Remember the common equity Bitcoin exposure. Obviously, this is the CEBE BTC as well as your CEBE per share here.

[00:20:45]Those are the two columns you're going to want to look at. But just to zero in on the results of the aggressive and the war machine scenarios there plus 84% plus 120% given those scenarios quite fun. So these are our trillion dollar pathways. Uh they obviously require different capital execution intensities, market multiple assumptions, what have you. But remember that 3x multiple with that static stack right here. if they buy no more Bitcoin, they need that 3x multiple to get to that $1 trillion valuation, which is about 20x the market cap from today. And then a war machine scenario with that 3x CBE multiple.

[00:21:21]That's $2 trillion market cap from a $50 billion market cap today. That is a 40x of the valuation of MSTR in 4 years from now. So if Bitcoin goes up, uh it starts to break the brain a little bit. of 40x in four years. And remember that war machine scenario is under 2 million Bitcoin. I think they could get that by end of 2027. I don't think that's crazy.

[00:21:47]I don't know. So yes, this is my final thesis. I think that strategy is absolutely a trillion dollar equity. I think the valuation of this company will be in the multiple trillions in the next 10 years. Um, look at the asset. They own the most of the Apex asset. They own the most of the Bitcoin. They had this incredible machine that they have constructed with STRC with MSTR. And then if you're concerned about the MSTR share price, well, if you use CEBE per share and Bitcoin goes up over time, the preferred equity model is incredible. So yeah, if you're listening to this video and you've listened this far and you own MSTR, in my humble opinion, if you understand CEBE, well, I think that you are part of the new wealthy elite. Not financial advice, financial entertainment. I just got to say I've never been more bullish on this company.

[00:22:33]My name is Adam Livingston. I am the Bitcoin wizard. Thank you so much for tuning in to today's weekend transmission of the orange gospel of Bitcoin and strategy. Please do me a favor, like the video. Subscribe to the channel. That way you can support me during my quest to orange pill the entire world. Have a terrific Memorial Day weekend. I will see you tomorrow, my dearest little goblin rats. Class dismissed. We all want to own more Bitcoin, but most of us aren't sitting on piles of idle cash. And that is where Horizon comes in. Horizon lets homeowners convert a portion of their home equity into Bitcoin, so they can diversify into an asset with stronger long-term growth potential. What makes Horizon stand out is its flexibility.

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