Stretch discount pressures MicroStrategy and Bitcoin
The discount on MicroStrategy's 'Stretch' yield product is creating a structural overhang that could force dilutive equity sales, weighing on both MSTR and Bitcoin.
The argument
The speakers discussed how the product trading roughly 20% below par limits capital market access. They highlighted Jeff Dorman's analysis suggesting a high probability of ongoing non-accretive MSTR stock sales to support the product, which would protect Bitcoin but hammer MSTR equity.
The thesis, stress-tested
✓ What validates it
- ✓MSTR stock falling to 0.7 of its market net asset value (MNAV)
- ✓A formal reduction or elimination of the Stretch dividend
▸ Risks discussed
- ▸A sudden Bitcoin price rally could organically resolve the collateral and yield pressure
- ▸Saylor could find alternative private funding sources to bridge the cash outlay
Hear it yourself
"The InterContinental Exchange, which is the parent company of the New York Soccer Exchange, they backed OKX at a $25,000,000,000 evaluation with a plan to launch tokenized New York Stock Exchange stocks and derivatives later this year on OKX. This is putting just TradFi and DeFi into the same app, finally. OKX is trusted by over a 120,000,000 global users and is bringing products to The US market that Wall Street has been talking about for years, and OKX is delivering them. This is the OKX new money app. It's not just a vision, but it's a road map with institutional backing to execute on it. Not an OKX user yet."
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