MicroStrategy capital structure remains highly accretive
The bull case argued for MicroStrategy is that its true market net asset value is highly resilient, with capital market activities remaining accretive to common shareholders even under downside scenarios.
The argument
The guest argued that critics overlook the preferred stock and outstanding preferred shares when calculating market net asset value. Even if the premium completely evaporates, the company would only need to dilute shareholders by an estimated 5% per year to cover its dividend obligations while maintaining a 40% Bitcoin amplification.
The thesis, stress-tested
✓ What validates it
- ✓MicroStrategy premium to market net asset value stabilizing or expanding
- ✓Successful management of dividend obligations without tapping core Bitcoin reserves
▸ Risks discussed
- ▸Bitcoin price falling to the $25,000 impairment level
- ▸Potential dilution of common shareholders if premium completely evaporates
Hear it yourself
"It's just the simple fact that right now, if you go to their transparent information, you can see that right now the effective yield is probably slightly over 13%. So really at the end of the day, it's simply the market signaling to strategy. Hey. In order to, essentially by Stretch, if we wanna take our money by your equity, then we need to be compensated above 13% right now to take on that added risk. Alright. Let's do it. Adam Livingston, thank you for coming on the show, man. This was this was a bit of a last minute one. Stretch has been having a real tough time for the last week or so. And, I thought you were the right guy to get on the call and and figure out if Sailor is trapped in this trade."
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