MSTR Is Amplified Bitcoin. STRK Is Structured Bitcoin. STRC is Treasury Bitcoin.

Shares of the world's largest corporate holder of Bitcoin.

Lower this morning, micro-strategy is now known as

simply a strategy reported.

It's best quarterly profit ever well above the loss

and analysts we're expecting and reversing the year ago.

Loss of company now holds more than 600,000 Bitcoins.

Join us now, Michael Seller, the company's executive chairman,

3% of all the Bitcoins that will ever be minted.

628,791 owned by a strategy, but who's counting?

Yeah, thanks for noticing.

We see Bitcoin as digital capital.

The business model of the company is to accumulate the digital capital

and then issue digital credit like preferred stocks

against that digital capital in order to strip the volatility

and the risk off of the Bitcoin and provide yield to investors.

And the latest preferred stock offer,

it was going to be a half a billion and why not do two and a half billion?

So five times as much because of demand?

You know, my first IPO was $48 million in 1998.

This year we did four IPOs for a total of about,

the first was half a billion, half a billion, a billion.

And this is the largest IPO of the year, two and a half billion.

Like the tide, do you have, are they all orange now?

Mostly.

We only wear orange ties.

You only wear orange ties because I have, I went to DC and didn't think about it.

War and orange tie, every single person thought I was like advertising Bitcoin.

And it on, you know, I had a picture that I put out and on Twitter.

I'm like that, like supposedly a holder.

It's dangerous to do that unless you're Michael Seller.

I'll just say that.

The future is orange, Joe.

Unless it's Halloween, my wife's birthday.

So these numbers were staggering.

It's very arcane, very hard to understand.

Are you basically just a leveraged acquirer of Bitcoin?

And that's what your company is.

Here's the way to think of it.

Bitcoin is a digital commodity.

It's about 50 volatility, 50 ARR.

And you want to hold it forever, 50-year duration asset.

OK.

If you want amplified Bitcoin, MSTR, the equity is amplified Bitcoin.

People want 2x Bitcoin, 2x Bitcoin exposure.

The options, jockeys love this, the derivatives traders love this.

If you want structured Bitcoin, that's strike, STRK.

We give you like the 80% of the upside.

And we give you 20% in a structured dividend.

And then we give you principal protection.

That's for people that would prefer to invest in hedge funds or S&P index.

So using the proceeds to buy more Bitcoin, you're just

keep adding on to how much Bitcoin you have.

And your average price is what?

73,000.

Yeah.

We'll sell a credit instrument.

Like strike, and we'll buy Bitcoin.

So we're taking the volatility and the duration and the upside

for our equity investors.

And we're giving a structured instrument to the credit investors.

Now, stretch, which is our latest IPO.

And I think the most exciting product, it's like treasury Bitcoin.

It's for someone that wants monthly dividend.

They want principal protection.

They want the lowest volatility.

They want a high yield savings account.

And it kind of competes with money markets or with

treasuries.

And so what the company has done is we're taking this pure digital

capital asset that's got a lot of performance, but a lot of

volatility.

And we're refining it into securities that conventional

investors can buy depending upon their risk tolerance,

their duration interest.

Is there ever too much Bitcoin for you to own?

Like if you could own all of it?

I don't think we'll get all of it.

I don't think in the range of 3 to 5 or 3 to 7% is too much.

BlackRock is up.

No, I was thinking about the mental exercise of if you could

actually own all of it.

Like if you would even bless you, if you would want it.

Well, we started and we had very little in Bitcoin was 10,000.

And now Bitcoin's more than 100,000.

And 97% of the Bitcoin is worth 10 times as much.

And somebody else not us has it.

So it's a practical matter.

What we're doing is we're monetizing and powering up this.

I totally get it.

I just mean if you owned all of it, would that change the entire

behavior?

Yeah, we wouldn't want to own all of it.

We wouldn't want to.

We want everybody else to have their peace.

The nice thing there is there's 160 companies that are

capitalizing on Bitcoin in the public market up from about 60

last year.

So the Bitcoin Treasury movement is exploding.

And companies like Meta Planet in Japan and Capital B

in France and SmarterWeb in the UK.

And then there's a raft of them in the US, Anthony

Pompoyanos company.

And 21, they're all capitalizing.

The big idea is I take digital capital.

I issue digital credit.

And a digital credit instrument can either be longer

duration or it can be higher performance.

We're offering 9% dividend yield with stretch.

The average money market's 4.2% dividend yield.

No one would ever want to give a 9% perpetual yield in a bond

that's backed by real estate or backed by gold or backed by any

conventional fee asset.

But we're investing in Bitcoin and my 20 year forecast.

For Bitcoin, it's 30% a year, ARR.

So it's easy for us.

Sort of a philosophical question about treasuries, actually.

And I don't know how much you believe in US dollars these days.

But the question is, if you believe that corporations,

if you believe one day Warren Buffett, instead of by,

instead of holding 300,000 Warren Buffett.

What?

Maybe not Warren.

Well, instead of holding $300 billion of treasuries,

call their rat poison.

He would hold.

He would hold.

He would hold.

That all these companies, instead of holding cash or treasuries,

they would all hold their money in Bitcoin.

If that were true, what would that do to the US government

and its ability to operate?

Well, I think the key to keeping mine is Bitcoin is demonetizing

foreign real estate, private equity, public equity,

other sorts of store of value assets everywhere in the world.

20th century, physical analog assets are becoming

21st century digital assets.

These companies, like Apple and Microsoft,

if they could buy the S&P index, they'd be better off.

It's against SEC rules.

The only, if they could buy each other's securities.

If the MagSuppen could buy each other's securities,

they would be better off.

That's against SEC rules.

The only security Apple can buy is Apple stock.

And what do they do?

They buy their own security.

So, in general, if you're trying to create shareholder value,

you don't want to park it in a fiance currency,

you want to park it in a tangible asset.

But gold and real estate don't make sense.

Could you ever see, you know what we're talking about?

We're talking about stable coins.

And treasuries having to back those.

Could you ever see a day where they'd be backed by Bitcoin?

You know, that's unclear to me.

I think that the two dynamic trends in the crypto economy

right now are the explosion of digital currency,

which is what a stable coin is,

backed by the currency equivalent,

and the explosion of digital capital,

which is what Bitcoin is,

and Bitcoin is backed by energy, computer power.

And I think the currency is short-term medium exchange.

Like, if you need money for less than four years,

people are going to the currency.

And Bitcoin is long-term store of value.

It's a four years to 40 years out.

And so it's a matter of duration there.

The word stable and Bitcoin don't really go together that well.

But when you say stable coin and you're talking about a fiat currency,

that does not compute either.

There's nothing stable about having something that goes down

every decade, it's worth what?

How much less every decade is that you're just sitting on a waste land?

I want to turn theories to one.

I'll say that it's a medium exchange and a store about one of them.

We need, but so Michael said,

so how much your Bitcoin on your balance sheet

is worth what's 75 billion?

On a good day, 72 billion.

72 billion.

What strategy market cap?

About 120 billion.

So you can issue stock because it's such a premium to what

Bitcoin you're holding, you can issue equity to buy more Bitcoin.

It almost seems like it's too good to be true.

But you need things to hold up.

You wouldn't want it to sell it at discounted to the Bitcoin you hold.

Yeah, we announced that our earnings call last night

that we don't intend to issue any equity to an M-Nav of last night.

You do.

Two and a half.

Even, okay, and you consider preferred equity too, right?

What we can do is we can issue equity at a premium to Bitcoin.

And we can also issue credit instruments.

Credit instruments.

So all of those are creative.

They all generate yield.

What we announced last night is that our target M-Nav is four.

And that means four times our underlying Bitcoin.

And above that, we'll be very active from two and a half to four.

We may be opportunistically active.

But below M-Nav of 2.5, we're only going to use equity to pay dividends.

So again, it just seems like there's quite a bit of leverage.

Impossible.

Horrific events if there was a terrible downside pull.

In the past, when we've seen the move from take your pick, what would go 75?

Back to 17, I think, or 65 back to 17.

Are there nights where you're pacing and not sleeping and wondering about?

We lived through the $66,000 to $16,000 drawdown.

So we have a PhD in leverage.

There's three types of leverage.

There's short duration margin leverage where you mark some.

Did you?

We had a Silvergate loan, the bank failed.

And so you don't want short-term margin leverage.

The second type of leverage is long or a mid-duration bond leverage.

That's better, but it's not great.

We had some of that.

And we decided to remove that.

And we've got some convertible bonds now.

There's sort of that.

The best leverage we've discovered is equity leverage.

So issue preferred equity that never comes due, right?

The principle never comes due.

And we've done $6 billion plus of that financing this year.

That's strike, stride, strife, and stretch.

So what I think is that if you're using preferred equity, you can lever up 30, 40, 50% because

the principle never comes due.

If you're using bonds, you want to be 20 to 30% because that way you can take an 80% drawdown.

If you are a margin leverage, you just don't want to go there at all.

And that's the only way to retell this.

Is the person on the other side of that trade in a bad situation?

I mean, this is a perfect trade for you.

Is the person on the other side who's got the preferred who can never make it come due?

Are they willing to go in good position?

The people on the other side of the trade would be Bitcoin investors that are getting principle

protection, a guarantee dividend and the upside of Bitcoin.

So they let that's the advantage of that.

They get the guarantee dividend even if Bitcoin comes down below your strike price, below

$76,000?

Strike is sitting, strike is like six times over collateralized.

So if you look at these preferred, the weakest one is 5X over collateralized stride.

So they've got $5, a Bitcoin collateral for every $1 or a principal at risk.

So what we're doing is we're providing people seniority in the capital structure.

If what you want is Bitcoin upside but you want principle protection, you go for strike.

If what you want is a high yield savings account that pays 9%, instead of 4%, and you're

willing to accept 7, 8%, Bitcoin over collateralized, 7, 8X Bitcoin over collateralization, you would

do stretch.

So Halloween you still go with the orange basically?

Well, now I've got a matching outfit.

I know what to go with.

Orange.

If we were to have a party, would you wear orange to our party?

Uh, maybe.

I'll wear some amount of orange.

Like it.

Like it.

Thank you, Michael.

Say hello.

Nice to see you, sir.

Thank you.

How about you?

Little more.

80%?

You know, I'm slow.

So I got to listen again.

I'm going to have to replay it for myself.

You can replay it.

I'm going to ask Chad Gbt.

Exactly.

There's some translation.

It's great when you're on set.

Thanks.

Thanks for having me.