MSTR Stock Achieves 0% Leverage! Insane Common ATM, Cash Stack at $6.69b, MSTR Up, STRC Up, BTC Up!

0:00 Hello everybody. So this video is entitled MSTR stock. Stacking USD, stacking cash. That's what Sailor did. At least he didn't buy Bitcoin, which I'm happy about because, you know, if you sell Bitcoin in the mid60,000s, it's good to not stack it $15,000 more you know, a matter of weeks later. So that's good. There's a there's a there's a few things to discuss, though. and of course it's it's it's the amazing ATM. I mean, he ATMed so so much.

0:34 That that amount you know, you have to go back a while to see that amount of ATM. The demand on the stock must have been huge. The buying pressure on the stock must have been huge as as Bitcoin was rising. And Sailor really took advantage of that ATM. He raised $2 billion. And one of the thing that is very interesting that he did and that is a little unfortunate. I wish he had not not done that because I believe all he has to do is wait. I believe the cure for strategy right now is waiting. Well, clearly I'm the only one believing that because Sailor believes he should do the ATM as much as he can and he certainly didn't. So, not only did he raise the USD reserve, right, which is there to back the credit, the digital credit, right? 5.1 billion. He raised it to 5.1 billion. I thought he was going to stop at five billion. Fine, 5.1 billion. But that also signals to me that he's going to likely keep going and keep increasing it. When is he going to stop? I don't know. Maybe he's stopping next week though because if you look, this is the first time I see him tweet this. He has 0% net leverage. 0% leverage. So what does that mean? That means that he added to a separate he added to a separate cash reserve. So if you go on the website now, you have the USD reserve and then you have the USD cash a separate cash reserve which is which which is now 1.585. So that's what it calls here 1.59 billion. It just started that 1.59 billion worth of cash on the balance sheet in addition to the USD reserve. It'd be interesting to see how these two buckets are treated differently. You know, I'd like to know where they're invested. Which type of treasuries are they invested in? Or is it commercial paper? What is it? what is he doing with the cash? Anyways, the point is he he's now got a very powerful sound bite in in interviews and communication to Wall Street, which is this euro leverage because if you look at the debt, if you go on the dashboard, you look at their debt, you see they have 6.75 billion worth of debt. That's the convertibles, right? And they have more than that in cash. If you add the USD reserve 5.1 billion and then you had the 1.59 billion worth of the USD cash, you have 6.69 billion versus 6.75 billion. So actually it's it's it's yeah there's no there's no leverage. It's it's negative, right? So he has more cash than he has borrowed. So the market this signals to the market that in many ways the name is is a is a pseudo zero debt name because remember in sailor's speech the preferreds are not considered debt.

3:18 They're considered perpetual. They are they are they are perpetual preferred. They are not debt in the sense that they never ever need to be paid back paid back. You just need to pay the dividend. If you don't pay the dividend, these preferred can force you into bankruptcy. you just need to pay the dividend, but you never need to pay them back. That's why it doesn't call it he doesn't call it debt. He calls it a perpetual preferred, right? It's not exactly debt if you don't need to pay it back. And I agree with that characterization. It's just that Wall Street has forgotten about perpetual preferred and and and often times matches perpetual preferred the same bucket as debt. But it's it's technically different when they are perpetual. And and you know, you could argue it's also different when it's a 50 year or 100year debt, right? You have some companies like Google recently issuing 50-year debt. You could argue the value of the money in 50 years really won't amount too much. So it's it's akin to not having to pay it back.

4:12 But any anyways, in the case of perpetual, it it really is perpetual. It really is for forever. So So that's a good thing from from a from a argument standpoint and from a sound bite standpoint. You can say now we have zero leverage. All of the cash covers our debt. All of the cash covers, you know, I don't know is it two and a half years worth of dividend commitments, something like that. So, so you know, he's really strengthening the balance sheet.

4:38 Everything for stretch. Nothing is done for the common. Everything is done for stretch. Now, more for the sake sake of consistency. stacking cash, you know, I've called it neutral before. I'll keep calling it neutral. It is it is neutral. Whether you like this strategy or not depends on whether you think the market will like the strategy or not. That's that sounds total logical a little bit, but it's if you think the market will give sailor credit for having stacked so much cash. If you think that then that's a good idea to stack cash. If you think the cash is just, you know, losing losing value and and a melting ice cube for no reason, then you would hate the delusion. For now, I'm I am cautious, but for now, I think cash is still instilling a little bit of confidence in STRC. If we are being truly objective, STRC is move moving much slower than many of us would prefer. It's moving slower, but it is moving in the right direction. And and and you know, the the these moves have an effect. It's moving in the right direction. It's it's at 9657 in pre-market. You know, if we move a dollar a week, that means next week we'll be at like 97 and change and the week after 98 and change and the week after 99 and change and then that's it, right? So maybe less than a month to wait, maybe three weeks to wait. So it seems it seems to be to be to be working. and you know the buyback.

6:06 Yeah, he kept doing the buyback and I'm not happy about him keeping to do the keeping doing the buyback. I I don't I I don't think this changes much. but to me the the buyback that Sailor has done to me is mostly what I call signaling. It's to to show the market, hey, hey, we're buying it back. Hey, we're helping it out. but it's signaling. And why do I say signaling? Because he bought back 136 million for an instrument that has a market cap of 9.5 billion. So 9.5 billion. 136 million. Yeah. I mean, you could you could argue some of the rise in in stretch is due due to the buyback. You know, you could divide this by that and argue that. but I'm not I'm not going to do that because because to to me clearly stretch is going up because if you look at other digital credit instruments, you know, like like SATA, it's it's it's all also going up and and and you know, it's he's adding to the cash reserve. So, I'm not so sure the buyback is making that much of a difference. he's been doing the buyback a long time. There's been weeks weeks where the buyback didn't make that much of a difference. I wish he didn't do the buyback. He's fine. He's doing the buyback. To me, that's signaling.

7:09 but but stacking the cash is now meaningful, right? He's now stacked a lot of cash. What is he going to do with that cash, right? It's it's a stretch needs to notice at this point that there's a lot of cash stacked. And I still think the best cure to strategies stretch the best cure is to just wait. To me, to me, that's the best cure. We just need to wait. And waiting, we are we are waiting. And if you look if you look at at MSTR and I bit today. so if you look at MSTR MSTR is actually up quite a bit more. You know MSTR is up more than than I bit today in pre-market, right? But but we we we're used to them moving in lock step at least the past few days. we seem to be gaining back some of that amplification. This amplification here is like 1.3 1.35. So that's pretty nice nice to see it rebounding. Perhaps that's because it didn't start to ATM again. that I'm being facicious here, but perhaps as soon as as the market opens, he's going to ATM and then we'll we'll we'll lose that overperformance, but that that still gives me pause, which is the moment he stops ATMing, strategy should should skyrocket in theory, the moment he starts atming. And of course, strategy is doing well because Bitcoin is doing well and and Bitcoin is spiking at market open.

8:26 79,100 at market open. and that's nice in the absolute. I like it. I still think Bitcoin is behaving like a lot of assets right now which are too far too fast. Too far too fast. We had a valley of despair for months and then in a matter of 5 days we gained it all back. it's too far too fast in my view. But this is the nature of the markets. If you look the way so many of these high beta assets, so many of these stocks have moved, they they it's just been whiplash. They they just move like crazy at once. It's this is a this is a traders market. This is not an investor's market. It's it's moving like insanity. And then you have drops which are also like insanity. and and the the volatility is much higher than it used to be even last year. And it's certainly much higher than it used to be last decade. So I don't like to see things run this this much this fast. And and and and if you look at the fear and greed index, unfortunately the fear and greed is now in extreme greed. What is this? You know, I spent five or six months reporting about extreme fear and fear and in a matter of four to five days, we moved to extreme greed. If you go back on coin market cap and you look at the chart, I have never seen a spike this high. Like this spike is actually much much much much higher than the one that happened. You may remember that was around April, May of last year. And then the one that happened in in in November. No, was it November? Yeah, in November. The one that happened in November, you know, nothing like this.

10:06 Like we moved to neutral, we increased, we increased, we increased. Like even at the peak of Bitcoin, we never had a a grid this high. Like this is just this is just pretty crazy if you ask me that we're in extreme grid now. and to me to to to me these the these very sharp moves, you know, I as as a long-term investor who likes to DCA, I I I don't know what to do about these very sharp moves, but they don't make me comfortable, right? Traders love this stuff. But if you're a long-term investor and you see these sharp moves to the upside to to me, I I don't rejoice when I see a crazy sharp move to the upside, just like I don't rejoice when I see a crazy sharp move to the downside. It's as though the extremes of social media had taken over some of these assets. And so, so any anyways, and I'll conclude with this, especially ahead of a big macro week, we have a big macro week with a big event on Friday and we're up this much. So, so I think I think there's a lot of volatility embedded in this and and I think we could see some downside volatility. But anyways, this is not investment advice. This is not financial advice. This is only entertainment. I'm hoping you are entertained. Please like, please subscribe, follow me on Patreon, follow me on X. Thank you for watching and have a wonderful, wonderful day.