MSTR Today: The STRC Arbitrage Opportunity Most Investors Don't See

[00:00:00]Welcome to MSTR. Today in the Treasury Titans, nothing in this video is financial advice and Michael Saylor wants us to know that it's just Bitcoin.

[00:00:10]And it's just Bitcoin with a capital Bitcoin B. Let's go for the weekend vibes. Bitcoin hovering around 63,000.

[00:00:20]Nothing exciting happening, but these are the times the champions are made.

[00:00:26]And Michael Saylor, speaking of champions, says, "When I gave this speech in October of 2022, Bitcoin traded near 20,000. Strategy held 130,000 Bitcoin worth about 2.6 billion and MSTR was $24 split adjusted. Weeks later, after Bitcoin fell below 16,000, our debt exceeded the combined value.

[00:00:48]Think about this. Our debt exceeded the combined value of our Bitcoin and cash reserves by 300 million and MSTR fell into the $13 range by year end. Wow, what legends were buying at that range.

[00:01:01]I I salute you.

[00:01:03]We stayed focused, strengthened the company, and executed our strategy.

[00:01:07]Since then, strategy has raised over 60 billion of additional capital and invested in the Bitcoin, adding more than 716,000 Bitcoin. Today, Bitcoin USD reserves exceed debt by 48 billion. So, let me re- repeat that. Today, our Bitcoin and USD reserves exceed our debt by 48 billion. And again, back in 2022, um they were under by 300 million. So, what a difference. And that's again, people are just clueless. They don't think, they don't do the research, they just post drivel.

[00:01:43]"Thank you to everyone who believes," says Michael Saylor, "endured, and took the long view." And I'm raising my hand, Michael Saylor, because I have taken the long view and we'll play some of this video pretty epic coming up here at the end of this show. And finally, he says, "Listening, learning, and building with what? Humility, stewardship, and a steady hands." Love it, Fong.

[00:02:03]Okay, great post by AA says, "Every generational company looks insane before it looks obvious. Amazon was mocked for burning cash. Tesla was called a bankruptcy waiting to happen. Netflix was ridiculed after quick start and 75,000 Sorry, 75% stock collapse. Apple was written off before the iPhone era.

[00:02:22]The critics always sound intelligent in real time. They talk about margins, dilution, debt, valuation, risk, competition, and unsustainable models.

[00:02:30]Sometimes they're right, but when they're wrong, they miss the entire point. founders are not optimizing for Wall Street's next quarter. They are building for a future most people cannot yet price. Jeff Bezos saw the internet before retail understood it. Elon Musk started EVs before auto makers respected them. Reed Hastings saw streaming before media companies accepted it. Steve Jobs saw mobile computing before phones became platforms. Michael Saylor sees Bitcoin as digital capital before the market fully understands what a Bitcoin treasury company can become. That's why strategy gets hated, not because everyone knows it will fail, but because if Saylor is right, the critics are not just wrong about a stock, they're wrong about the future architecture of capital itself. The market always hates hates the bridge before it crosses it.

[00:03:13]And here we go. Michael Saylor dead center.

[00:03:17]And I think this is so key about this one phrase because if Saylor is right, the critics are wrong not just about a stock, but about the future architecture of capital itself. And that's why the bears are so furious.

[00:03:35]Adam says, "It is honestly impressive how this man took a $250 million uh company uh company to 54 billion in Bitcoin and the anime profile pic crypto traders still think they know what's up." Now, what is the actual post? Well, it's the Family Feud, which I love.

[00:03:51]Steve Harvey says, "Michael, name things low IQ bear said would kill your company." Bear, dead, ant. Bear, preferred dividends, ant. Bear, M and F compression, ant. Bear, Bitcoin volatility, ant. Bear, the stock just closed is just a closed-end fund, ant.

[00:04:06]Steve turns to Saylor. Saylor, buy more Bitcoin. Ding ding ding ding, top answer. Bear spent 5 plus years furiously modeling strategy's funeral, while Saylor kept turning their panic attacks into more Bitcoin. At this point, they're not analysts, they're unpaid contestants in a game show where every wrong answer becomes collateral.

[00:04:24]>> [laughter] >> That's a good one, Adam.

[00:04:27]Chris says, "If you actually step back and look at the criticism around Stretch objectively, it genuinely looks absurd for two reasons. One, Stretch is not even a year old. Two, Stretch has raised over 10 billion worth of capital in 11 months, which by any reasonable standard is extremely successful. Financial products take years to build trust in a meaningful track record. The concept of digital credit has literally only just emerged. And you, my friends, are on the ground floor." PO says, "Everyone has to tell money to sit with their views on Stretch and MSTR. Drown out the noise and understand that the dividends will be paid. Bitcoin won't have to be sold in meaningful amounts. There is a well-thought-out plan behind all of this." Yes, PO, it's so true. That well-thought-out plan has been being orchestrated by Michael Saylor himself.

[00:05:12]Chris says, "Here are some stats to put Stretch's recent price action in the context. Since IPO, Stretch has closed below par eight times. Every single time it recovered.

[00:05:20]>> [clears throat] >> Excuse me. The longest recovery was 69 days, which was the IPO phase itself.

[00:05:24]The shortest recovery was one trading day. The average is nine. The current recovery is now 23 days in counting, making it the third longest recovery since IPO. The current uh low close of 88.59 marks the deepest discount to par Stretch has seen so far. This is not the first test. It won't be the last. And here's taking Stretch um tracking Stretch days to par."

[00:05:46]So, good little graph by Chris here.

[00:05:49]Glad to see he's getting back into the graphs cuz they are so good and so cool.

[00:05:52]And we'll end with Samson Mow just saying this, "Stretch is a brilliant instrument. It effectively is what I tried to do with Bitcoin bonds. Strip out the volatility from Bitcoin and show the upside with investors. There's a massive market for a product like this, somewhere in the ball park ball park of 200 trillion. There's nothing structurally wrong with the design of Stretch or Saylor Mars, etc. Unless you think Bitcoin won't appreciate in the long term, which I'm sure none of us do."

[00:06:14]Can Stretch trade under 100? Yes, of course it can. It moves freely according to market forces. This drop was caused by some leverage plays. Do some people panic when it's below par? Probably.

[00:06:23]That's the behavior of short-term capital. However, when Stretch is trading below par, that's an opportunity for long-term capital to arbit. It's the same case when stablecoins like USDT, note Stretch is not a stablecoin, are trading below their peg. It presents an opportunity for people to come in and earn money by buying at an effective discount and redeeming it for $1. It happens all the time. Stretch pays the same dividend whether you bought it for 90 or 100. Long-term capital will absorb any below par Stretch like a dry sponge.

[00:06:46]Keep in mind that Stretch is not even a year old. It's still a baby, albeit one that's growing at an incredible pace. It seems fashionable to dunk on it these days, but it's far too soon to say it doesn't work. Remember, the goal is to strip out the volatility from Bitcoin and package it into an instrument for investors who aren't necessarily seeking out Bitcoin. This isn't a year-long project. It's a decades-long initiative that requires a massive balance sheet to shock shock absorb. And that's exactly what Strategy has. Now, as I said, we have a great clip coming at you from Michael Saylor from many, many years ago. That's 4 years ago. So, sit back, relax, and enjoy.

[00:07:22]Today's episode is brought to you by Roxe a platform building the rails for the next era of Bitcoin capital markets.

[00:07:29]If you've been watching Michael Saylor and Strategy reshape how the world thinks about money, Roxe is where that movement becomes a financial system. The first capital markets denominated entirely in Bitcoin where you can trade stocks, futures, and fixed income instruments with Bitcoin as the actual currency. Pricing everything in Bitcoin because that's the only way to know if your investments are actually growing your stack or just your dollar balance.

[00:07:55]And right now, two instruments on the platform are paying people in Bitcoin every 2 weeks. Stretch is strategies preferred stock, 11.5% annualized, paid monthly in Bitcoin. Seta is strives, 13% annualized, every 15 days, also in Bitcoin. Hold both and you have a recurring Bitcoin bit paycheck hitting your account twice a month from two of the most credible balance sheets in this space. This is what Roxe is building toward, a world where Bitcoin is not just held, it works for you. Head to Roxe at the link below and see what your Bitcoin income could look like. Get your Bitcoin paycheck at Roxe, the Bitcoin capital market. Link below and visit rxm.sh/register.

[00:08:39]>> Ein Rand stories are stories about the struggle of the individual against the collective.

[00:08:46]And they're [clears throat] gripping.

[00:08:49]And when I first read Atlas Shrugged, I couldn't put the book down.

[00:08:54]It became a 12 and then a 14 and then a 16-hour day exercise.

[00:08:59]Um human nature doesn't change.

[00:09:04]Uh that struggle existed 100,000 years ago, that struggle exists today.

[00:09:10]What does change is technology.

[00:09:13]100,000 years ago, an enraged human being could maybe kill 10 other people.

[00:09:19]And today, an enraged human being can kill 100 million people.

[00:09:23]And so, as technology advances, our thoughts about about ethics and morality and technology and civility have to evolve.

[00:09:36]Today, [sighs] we struggle with the challenge of authority.

[00:09:40]You know, Lord Acton said, "Absolute power corrupts absolutely."

[00:09:46]And um the only difference between absolute power today and absolute power 10,000 years ago is today we have a company that listens to everything a billion people say.

[00:09:59]We have another company that answers the questions that 4 billion people ask.

[00:10:04]We have companies that deliver the food and all of the goods that you need to survive to hundreds of millions of people.

[00:10:12]We have one company that delivers all of the business software to 80 million corporations.

[00:10:20]Indirectly serving billions and billions of employees.

[00:10:26]Now, I ask you the question, if you got ejected out of the third biggest country in the world, or if I denied you privileges to live in any of the five largest countries in the world, would your life go on?

[00:10:42]Probably.

[00:10:44]Now, what if you actually got canceled by Apple, Amazon, Facebook, Google tomorrow?

[00:10:54]The question is, would your life go on?

[00:10:56]What Stop and think a little bit about what happens if they simply turned off your account, seized your photos, turned off your messages, took your documents?

[00:11:06]What if Microsoft just denied you access privileges?

[00:11:11]Could you run a business? Could you work?

[00:11:15]It's a big question. We we've never had I used to make the joke, Apple's the most valuable company in the world because there's never been a company in the world as valuable as Apple.

[00:11:26]It legitimately is the most valuable because it can change the lives of a billion people over the weekend by shipping some electricity.

[00:11:34]And that is uh not something we struggled with 100 years ago.

[00:11:41]So, the question really is what happens if this goes on?

[00:11:46]Companies get bigger. We got big tech.

[00:11:48]Governments get bigger. As the companies get bigger, when the company serves 3 billion people, then that means one bureaucrat can make one phone call to that company and potentially turn off all of the information flowing to all 3 billion people over the weekend.

[00:12:08]Right? This is uh It's a new idea and it's a It's a disturbing idea.

[00:12:16]Uh the story of Atlas Shrugged is the story of of of individuals struggling against the collective and eventually they realize it's a corrupt and a rigged game and they can't succeed at it.

[00:12:30]And the solution that John Galt offers is to withdraw from the corrupt economy.

[00:12:36]So, should we follow John Galt's example?

[00:12:40]Should we just withdraw from a corrupt economy?

[00:12:44]Can we?

[00:12:45]Well, obviously we haven't.

[00:12:47]Um you know, if another famous writer, Robert Heinlein, he had a quote quote, he said, "You don't win wars by dying for your country.

[00:12:56]You win wars by making the other guy die for his country."

[00:13:00]>> What's the second best? There is no second best.