Q1 2025 MicroStrategy Inc Earnings Call

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[music] you have joined the meeting as an attendee and will be muted throw.

Operator: You have joined the meeting as an attendee and will be muted throughout the meeting. Hello, everyone, and good evening. I'm Shirish Jajodia, Corporate Treasurer and Head of Investor Relations at Strategy.

At the meeting.

Speaker Change: Hello, everyone and good evening.

Speaker Change: I'm sure he's the Georgia, corporate Treasurer, and head of Investor Relations and strategy.

Shirish Jajodia: I will be your moderator for Strategies 2025 First Quarter Earnings Webinar. Before we proceed, I will read the Safe Harbor Statement. Some of the information we provide during today's call regarding our future expectations, plans, and prospects may constitute forward-looking statements. Actual results may differ materially from this forward-looking statements due to various important factors, including the risk factors discussed in our most recent 10-Q filed with the SEC and our 8-K filed on April 7, 2025. We assume no obligation to update these forward-looking statements which speak only as of today. Also, during today's call, we will refer to certain non-GAAP financial measures.

Speaker Change: I will be your moderator for our strategies.

Speaker Change: <unk> first quarter earnings webinar.

Speaker Change: Before we proceed I will read the safe Harbor stapling.

Speaker Change: Some of the information we provide during todays call regarding our future expectations plans and prospects may constitute forward looking statements actual results may differ materially from these forward looking statements due to various important factors, including the risk factors discussed in our most recent.

Speaker Change: In Q filed with the SEC and our 8-K filed on April seven 2025.

Speaker Change: <unk> no obligation to update these forward looking statements, which speak only as of today.

Speaker Change: Also during today's call David referred to certain non-GAAP financial measures reconciliations showing GAAP versus non-GAAP results are available in our earnings release and presentation.

Shirish Jajodia: Reconciliations showing GAAP versus non-GAAP results are available in our earnings release and presentation, which were issued today and are available on our website at strategy.com.

Speaker Change: Which were issued today and are available on our website at strategy Dot com.

Shirish Jajodia: I would now like to welcome you all to today's webinar and let you know that we will be taking questions using the Q&A feature at the bottom of the screen, and you can submit your questions throughout the webinar, and Michael, Phong, or Andrew will answer the questions at the end of the session. Please be sure to provide your name and company's name when submitting your questions.

Speaker Change: I would now like to welcome you all to today's webinar and let you know that we will be taking questions using the Q&A feature at the bottom of the screen and.

You can submit your questions throughout the webinar and Michael <unk>, Andrew will answer the questions at the end of the session.

Speaker Change: Please be sure to provide your name and company when submitting your questions.

Shirish Jajodia: I'll now walk you through the agenda for today's call. Phong Le will cover the business highlights for the first quarter of 2025. Second, Andrew Kang will cover the financial results for the first quarter of 2025. And then Michael Saylor will provide an in-depth strategic review of our Bitcoin treasury strategy.

Speaker Change: I will now walk you through the agenda for today's call first.

Speaker Change: <unk> will cover the business highlights for the first quarter of 2025.

Speaker Change: Andrew Gang will cover the financial results for the first quarter of 2025.

Speaker Change: And then Michael Saylor will provide an in depth strategic review of our Bitcoin Treasury strategy.

Shirish Jajodia: And lastly, we will open it up to Q&A.

Speaker Change: And lastly, we will open it up to Q&A.

Phong Le: With that, now I'll turn the call over to Phong Le, President and CEO of Strategy. Thank you, Shirish. Hello, everyone. I'd like to welcome all of you to today's webinar.

Speaker Change: With that now I'll turn the call over to <unk>, President and CEO of strategy.

Speaker Change: Thank you Sherry.

Speaker Change: Hello, everyone I would like to welcome all of you to today's webinar.

Phong Le: With just a few days to go, I'm excited to invite you all to Strategy World 2025. Next week, May 5th through 8th in Orlando, Florida. Shirish, thank you. Come meet our software customers, partners and employees, explore our innovations in AI and BI, and engage with global corporate and thought leaders shaping the future of Bitcoin for corporations. You can visit our website to register if you haven't already, and I look forward to seeing many of you in Orlando.

Speaker Change: With just a few days to go I'm excited to invite you all to strategy World 2025.

Speaker Change: Next week May five through eight in Orlando, Florida.

Speaker Change: Sure issue anymore. Thank you come meet our software customers partners and employees explore innovations in AI and by engaged with global corporate and thought leaders shaping the future of bitcoin for corporations.

Speaker Change: You can visit our website to register if you haven't already and I look forward to seeing many of you in Orlando.

Phong Le: Moving on to the Bitcoin highlights for Q1 2025. Strategy remains the largest corporate holder of Bitcoin in the world, now holding 553,555 Bitcoins, with a total Bitcoin market value of $52 billion as of April 28. In the first four months of 2025, we acquired an additional 106,085 Bitcoin for a total purchase cost of $9.9 billion, an average price of approximately $93,600.

Speaker Change: Moving on to the Bitcoin highlights for Q1 2025 strategy remains the largest corporate holder bitcoin in the world now holding 553555 declines with the total bitcoin market value of $52 billion.

Speaker Change: As of April 28.

Speaker Change: In the first four months of 2025, we acquired an additional 106085 bitcoin for total purchase cost of $9 9 billion.

Speaker Change: And average price of approximately $93600.

Phong Le: In Q1 2025, Bitcoin's momentum accelerated meaningfully, driven by a series of landmark government actions. Most notably, the Trump administration announced the establishment of a strategic Bitcoin reserve. This bold move marked the first time a sovereign government publicly recognized Bitcoin as a National Reserve Asset. In parallel, the administration's broader pro-Bitcoin regulatory stance has further legitimized the asset class and attracted heightened institutional interest, setting the stage for deeper integration of Bitcoin into the U.S. financial system.

Speaker Change: In Q1, 2025, bitcoins momentum accelerated meaningfully driven by series of landmark government actions, most notably the Trump administration announced the establishment of a strategic Bitcoin reserve.

Speaker Change: This bold move marked the first time, a sovereign government publicly recognized bitcoin as a national reserve asset.

Speaker Change: Parallel the administration's broader pro bitcoin regulatory status is further legitimize the asset class and attracted heightened institutional interests setting the stage for deeper integration of bitcoin into the U S financial system.

Phong Le: On the capital markets front, we have also made significant progress. In the first quarter of 2025 and quarters to date in Q2 2025, we raised $6.6 billion net proceeds through our at the market or ATM equity offering program and raised $2 billion through the issuance of a convertible note offering. We also raised $1.4 billion through our newly listed preferred stock, Strikes and Strife. We expect to continue issuing innovative fixed income securities and seek to enable our common stock to outperform Bitcoin via intelligent leverage. Strategies added to its balance sheet in every single quarter since August 2020 across 60 plus announcements and 100% of our Bitcoin holdings remain fully unencumbered, demonstrating our long term conviction and unmatched consistency in executing our Bitcoin strategy.

Speaker Change: And the capital markets front, we have also made significant progress in the first quarter of 2025 and quarter to date in Q2 2025, we were a $6 6 billion net.

Speaker Change: Through our aftermarket or ATM equity offering program and raised $2 billion through the issuance of a convertible note offering.

Speaker Change: We also raised $1 $4 billion through our newly listed preferred stock strikes and strife.

Speaker Change: We expect to continue issuing innovative fixed income securities and seek to enable our common stock to outperform bitcoin intelligent leverage.

Speaker Change: Our strategy has added to its balance sheet and every single quarter. Since August 2020 across 60, plus announcements and 100% of our current holdings remain fully unencumbered demonstrating our long term conviction and unmatched consistency in executing our bitcoin strategy. This may.

Phong Le: This makes us the most committed corporate holder of Bitcoin globally, representing 2.6% of all Bitcoin in existence. As the chart shows, our pace of accumulation accelerated meaningfully over the past two quarters, reflecting both market opportunity and strong treasury operations execution.

Speaker Change: US the most committed corporate holder bitcoin globally, representing two 6% of all bitcoin in existence.

Speaker Change: As the chart shows our pace of accumulation accelerated meaningfully over the past two quarters, reflecting both market opportunity and strong treasury operations execution.

Phong Le: As the world's first and largest Bitcoin treasury company, we remain hyper focused on capital markets innovation and our Bitcoin operations to strategically accumulate more Bitcoin. We've now utilized $37.3 billion of capital to increase our Bitcoin holdings and drive shareholder value. That capital was acquired through three primary mechanisms. First, $10.6 billion of debt issuances, which $8.2 billion in aggregate principle is outstanding. The second $1.4 billion in perpetual preferred equity through strike and strife, reflecting investor demand for both yield and Bitcoin linked instruments. Third, $25.9 billion of Class A common stock issuances, and fourth, $836 million of cash flows from software operations.

Speaker Change: As the world's first and largest bitcoin Treasury company, we remain hyper focused on capital markets innovation, and our bitcoin operations to strategically accumulate more bitcoin.

Speaker Change: Now utilized $37 $3 billion of capital to increase our bitcoin holdings and drive shareholder value that.

Speaker Change: And that capital was acquired through three primary mechanisms first.

Speaker Change: $10 $6 billion of debt issuances of which $8 $2 billion in aggregate principal is outstanding.

Speaker Change: And the second one $4 billion in perpetual preferred equity through strike and strife, reflecting investor demand for both yield and bitcoin linked instruments.

Speaker Change: Third $25 $9 billion of class, a common stock issuances and fourth $836 million of cash flows from software operations.

Speaker Change: Okay.

Phong Le: As we reflected in this quarter's capital markets activity, 2025 continues the momentum we built in late 2024, with $10 billion already raised year to date through a diversified mix of securities. This included $6.6 billion in equity and $3.4 billion in fixed income instruments, demonstrating the breadth of our investor support and the strength of our market access. These offerings reflect our ability to tap multiple capital sources efficiently and strategically. Q1 demonstrated that the $18.1 billion raised in Q4 wasn't a one-off. We're operating at a new baseline. rather represents the foundation of our evolving and scalable capital strategy.

Speaker Change: As we reflected in this quarter's capital markets activity 2025 continues the momentum we built in late 2024 with $10 billion already raised year to date through a diversified mix of securities. This include a $6 6 billion in equity and $3 4 billion in fixed income instruments, demonstrating the breadth of our investors.

Speaker Change: Support and the strength of our market access.

Speaker Change: These offerings reflect our ability to tap multiple capital sources efficiently and strategically.

Speaker Change: Q1 demonstrated that the $18 $1 billion raised in Q4 wasn't a one off.

Speaker Change: We're operating in a new baseline.

Speaker Change: Rather it represents the foundation of our evolving and scalable capital strategy.

Phong Le: In terms of the largest treasuries in the world, we've gone from virtually negligible to now the 13th largest in treasury compared to the S&P 500 universe entirely through our Bitcoin holdings. And we're growing fast. Over the next two to four years, we believe we have the potential to surpass many of the companies ahead of us on this list, continuing to scale our Bitcoin treasury with conviction and discipline.

Speaker Change: In terms of the largest treasuries in the world we've gone from virtually negligible to now the 13th largest and treasury compared to the S&P 500 universe entirely through our Bitcoin holdings and we're growing fast over the next two to four years, we believe where the potential is perhaps many of the companies ahead of US on this list continue.

Speaker Change: To scale, our bitcoin treasury with conviction and discipline.

Phong Le: Five years ago, when we embarked on the Bitcoin journey, we were the only corporation with the courage and conviction to do so. Today, there are over 70 publicly listed companies globally holding over 700,000 Bitcoin who are adopting our playbook. There are newer corporate entrants adopting Bitcoin, and some are recurring Bitcoin stackers like us. We welcome all corporates to Bitcoin and are extremely proud to see Bitcoin treasury companies emerging in the US, Japan, India, France and other countries. We believe our unique attributes and track record of transparent investor relations, conviction in our Bitcoin strategy, innovative offerings, high volatility, combined with a scale of our Bitcoin holdings, will continue to differentiate us.

Speaker Change: Five years ago, when we embarked on the Bitcoin journey, we are the only corporation with courage and conviction to do so today. There are over 70 publicly listed companies globally holding over 700000, bitcoin who are adopting our playbook.

Speaker Change: There are newer corporate entrance adopting bitcoin and some are recurring <unk> doctors like us.

Speaker Change: We welcome all corporates.

Cohen: <unk> Cohen and are extremely proud to see bitcoin treasury companies emerging in the U S, Japan, India, France and other countries.

Cohen: We believe our unique attributes and track record of transparent Investor relations conviction in our bitcoin strategy innovative offerings high volatility combined with the scale of our Bitcoin holdings, we will continue to differentiate us.

Phong Le: Since we adopted our Bitcoin strategy in 2020, MicroStrategy stock has outperformed every major asset class in every S&P 500 company, appreciating $2,870. 2,887% today. To put that in perspective, Bitcoin itself is up 692%. The S&P 500 has risen just 65% over the same period. And while NVIDIA has been the top performing S&P 500 stock during this period with an 874% gain, we've outperformed NVIDIA by more than 3x. Not even close.

Cohen: Since we adopted our bitcoin strategy in 2020, Microstrategy stock has outperformed every major asset class and every S&P 500 company appreciating 2872.

Cohen: <unk> thousand 887% to date.

Cohen: To put that in perspective bitcoin itself is up 692%.

Cohen: Yes, NP 500 has risen just 65% over the same period.

Cohen: And while the video has been the top performing S&P 500 stock during this period with an 874% gain we've outperformed a video by more than three X, it's not even close.

Phong Le: If you look at the last 12 months, we've similarly outperformed all the largest companies, as well as all the key indices. And if you look at the last three months, when the broader macro, when the broader macro markets witnessed the most volatility since 2020, we still managed to outperform the magnificent seven and key in this. Our performance metrics speak to the uniqueness and strength of our position in the market. Since launching our Bitcoin strategy, MicroStrategy's MSTR has not only outperformed Bitcoin itself, but every stock in the S&P 500. That kind of return doesn't happen by accident.

Cohen: If you look at the last 12 months, we similarly outperformed all of the largest companies as well as all of the key indices.

Cohen: And if you look at the last three months when the broader Marco when the broader macro markets witnessed the most volatility since 2020, we still managed to outperform the magnificent seven and key industries.

Cohen: Our performance.

Cohen: Foremost metrics speaks to the uniqueness and strength of our position in the market.

Cohen: Since launching our bitcoin strategy micro strategy Hasnt MST or has not only outperformed acquaint itself, but every stock in the S&P 500.

Cohen: That kind of return doesn't happen by accident. It's the result of.

Phong Le: It's the result of strategic focus, intelligent leverage, and our disciplined execution.

Cohen: Strategic focus intelligent leverage and our disciplined execution. We're also one of the most heavily traded and closely watched equities in the market today, both in spot and options markets.

Phong Le: We're also one of the most heavily traded and closely watched equities in the market today, both in spot and in options markets. MSTR consistently ranks among the top across open interest, daily trading volume, trading volume as a percentage of market cap. This level of engagement reflects more than just price action. It's a sign of growing institutional interest, retail participation, and the market's recognition of strategy as the capital market center of gravity for Bitcoin.

Cohen: <unk> consistently ranks among the top across open interest daily trading volume trading volume as a percentage of market cap. This level of engagement reflects more than just price action as a sign of growing institutional interest retail participation in the markets recognition of strategy as the capital markets Center of <unk>.

Cohen: <unk> for bitcoin.

Phong Le: Now I'll turn to our capital In October of last year, we introduced the 2121 plan, a bold but disciplined framework to raise $21 billion in equity and $21 billion in fixed income capital. We designed it to be agile, scalable, and responsive to market dynamics. Since then, we've reported having raised $20.9 billion in equity and $6.4 billion in fixed income capital, meaning we're 65% complete. Notably, 99% of the equity portion has been completed in a mere six months.

Cohen: Now I'll turn to our capital plan.

Cohen: In October of last year, we introduced the 'twenty one 'twenty one plan, a bold, but disciplined framework to raise $21 billion in equity and $21 billion of fixed income capital. We designed it to be agile scalable and responsive to market dynamics since.

Cohen: Since then we've reported having raised $29 billion in equity.

Cohen: $6 4 billion in fixed income capital means.

Cohen: We're 65% complete.

Cohen: Notably 99% of the equity portion has been completed and EMEA or six months.

Phong Le: We believe the accelerated progress is a testament to the strength of our market access and the credibility we've built with all groups of investors who've demonstrated increasing demand for our security.

Cohen: We believe the accelerated progress is a testament to the strength of our market access and the credibility we built with all groups of investors who've demonstrated increasing demand for our securities.

Phong Le: So what's next? Remember our original inspiration from the Hitchhiker's Guide to the Galaxy. The answer to the ultimate question of life, the universe, and everything. The number was 42 for our $42 billion capital plan. And given our success We're now going to double down with a new plan, the 42-42 Capital Plan. That's $42 billion in equity and $42 billion in fixed income, targeted through the end of 2027, and inclusive of our original $21-21 billion capital. This gives us the scale to pursue our strategy with conviction and the flexibility continue to adapt across markets.

Cohen: So what's next.

Cohen: Remember our original exploration from the Hitchhiker's guide to the Galaxy <unk>.

Cohen: The answer to the ultimate question of life, the universe and everything.

Cohen: The number was 42.

Cohen: For our 42 billion capital plan.

Cohen: And given our success.

Cohen: Now in a double down with the new plan the 40 to 42 capital plan that.

Cohen: That's $42 billion in equity and $42 billion in fixed income <unk>.

Cohen: <unk> through the end of 2027 and inclusive of our original $21 21 billion capital plan.

Cohen: This gives us the scale to pursue our strategy with conviction.

Cohen: And the flexibility continue to adapt across market cycles.

Phong Le: So to that end, we're pleased to announce that today we're filed for a new $21 billion ATM program. Later in the presentation, Michael will share with you a framework for how we think about our securities and credit risk as it pertains to our Bitcoin strategy, including illustrative examples how this framework would apply to the different types of securities we've offered. MSTR, or convertible bonds, strike and strife, and we're excited about this opportunity to discuss the framework, which we believe is helpful for understanding our capital financing decision. Under the new 4242 plan, we're 32% complete. That leaves us with around $57 billion of additional capital to be raised through the end of 2027.

Cohen: So to that end, we're pleased to announce that today, we filed for a new $21 billion ATM program.

Cohen: Later in the presentation, Michael will share with you a framework for how we think about our securities and credit risk as it pertains to our bitcoin strategy, including a less illustrative examples of how this framework would apply to the different types of securities we've offered.

Cohen: MST, our convertible bonds striking strife.

Cohen: We're excited about this opportunity to discuss the framework, which we believe is helpful for understanding our capital financing decisions.

Cohen: Under the new 40 to 42 plan, we're at 32% complete.

Cohen: That leaves us with around $57 billion of additional capital to be raised through the end of 2027.

Phong Le: As we move forward, we'll focus more on the fixed income side of our plan through instruments like strike, strife, convertible notes, and potentially new structures we may explore over time. At the same time, we'll continue to utilize the Equity ATM when conditions are favorable and when it represents an accretive and efficient option for our shareholders. The market has shown strong demand for instruments, and we tend to continue tapping new pools of capital in a thoughtful, value accretive manner, while maintaining a discipline leverage ratio between 20 and 30%, allowing us to responsibly scale while maximizing long term value.

Cohen: As we move forward, we will focus more on the fixed income side of our plan through instruments like strike strive convertible notes and potentially new structures, we may explore over time.

Cohen: At the same time, we will continue to utilize the equity ATM when conditions are favorable and when it represents an accretive and efficient option for our shareholders.

Cohen: The market has shown strong demand for instruments, and we tend to continue tapping new pools of capital in a thoughtful value accretive manner, while maintaining a disciplined leverage ratio between 20% and 30%, allowing us to responsibly scale, while maximizing long term value.

Phong Le: We intend to remain highly efficient with our use of our overall capital. We have $185 million of total fixed annual obligations for interest and dividends. which we can cover using a fraction of our daily trading volume as new stock issues. Put in perspective, our ATM activity this year alone has raised $6.6 billion. And our obligations represent just 3% of the daily traded volume of our equity and less than 1% of the total equity we've raised in the last 12 months. As a result, we're comfortable raising additional fixed income capital to buy more Bitcoin without being restricted by available cash or cash flow from our software operations to service all of our interest and dividend obligations.

Cohen: We intend to remain highly efficient with our use of our overall capital we have $185 million of total fixed annual obligations for interest and dividends, which we can cover using a fraction of our daily trading volume as new stock issuances.

Cohen: To put in perspective, our ATM activity. This year alone has raised $6 6 billion.

Cohen: And our obligations represent just 3% of the daily trading volume of our equity and less than 1% of the total equity raised in the last 12 months.

Cohen: As a result, we're comfortable raising additional fixed income capital to buy more bitcoin without being restricted by available cash cash flow from our software operations to service all of our interest in dividend obligations.

Phong Le: Mike will explain later why the strategy is highly accretive to our shareholders.

Cohen: Michael will explain later why this strategy is highly accretive to our shareholders.

Phong Le: We're tracking well ahead of our KPI targets for 2025. Year to date, we've achieved a 13.7% BTC yield, putting us well on pace to reach our full year target at 15%. BTC yield reflects the Bitcoin gain we've generated through our treasury operation. Our BTC gain is approximately 61,500 BTC years to date, representing a BTC dollar gain of $5.8 billion in the current at the current Bitcoin price.

Cohen: We're tracking well ahead of our Kpis targets for 2025 year to date, we've achieved a 13, 7% the BTC yield putting us well on pace to reach our full year target of 15%.

Cohen: BTC yield reflects the bitcoin gain we've generated through our treasury operations.

Cohen: BTC gain is approximately 61500 BTC year to date, representing a BTC dollar gain of $5 8 billion.

Cohen: And the current at the current the corn price.

Phong Le: Given our strong year-to-date performance in the favorable market environment, we're raising our KPI targets for 2025. We've raised our BTC yield target from 15% to 25% reflecting confidence in our ability to create value for our shareholders. And at the same time, we're increasing our BTC dollar gain target from $10 billion to $15 billion. These new targets better reflect the scale of our strategy and the value we believe we can unlock through disciplined Bitcoin acquisition. We remain disciplined in the use of both the ATM and other capital raising sources, doing so in a way to achieve our BTC yield and BTC dollar gain target.

Cohen: Given our strong year to date performance and the favorable market environment, we're raising our kpis and targets for 2025.

Cohen: We've raised our BT see yield target from 15% to 25%, reflecting confidence in our ability to create value for our shareholders.

Cohen: And at the same time, we are increasing our BTC dollar gained target from $10 billion to $15 billion.

Cohen: These new targets better reflect the scale of our strategy and the value. We believe we can unlock through disciplined and bitcoin acquisitions.

Cohen: We remain disciplined in the use of both the ATM and other capital raising sources doing so in a way to achieve our BTC yield and BTC dollar gain targets.

Andrew Kang: I'm now going to turn the call over to Andrew, who will discuss our financials for the quarter in further detail. Thank you, Phong. I will begin with a quick review of the software results, then go into more detail on our Bitcoin In Q1, total software revenues were approximately $111 million, down 3.6% year over year. The lower product license revenues, along with support revenues in Q1, continues to be as expected and our overall revenue trend continues to reflect the ongoing transition of our software business from on-prem to the cloud. Our cloud results in Q1 subscription services revenues increased 62% year over year, and now make up approximately 33% of total revenues, continuing our quarter over quarter double digit growth.

Cohen: I am now going to turn the call over to Andrew who will discuss our financials for the quarter in further detail.

Cohen: Okay.

Andrew Gang: Thank you <unk>.

Andrew Gang: We'll begin with a quick review of the software results then go into more detail on our quaint results.

Andrew Gang: In Q1 total software revenues were approximately $111 million down three 6% year over year.

Andrew Gang: The lower product license revenues, along with support revenues in Q1 continues to be as expected and our overall revenue trend continues to reflect the ongoing transition of our software business from on Prem to the cloud.

Andrew Gang: Our cloud results in Q1 subscription services revenues increased 62% year over year and now make up approximately 33% of total revenues continuing our quarter over quarter double digit growth.

Andrew Kang: Our subscription billing also grew again by 38% in Q1 to $24.5 million. The decline in product license revenues and support revenues continue to be offset by growth in cloud. And we continue to see growth in demand for our cloud platform, and anticipate this trend to continue and strengthen in the coming quarters. Lastly, cost of revenues were $34 million, up 13% compared to Q1 of last year. The increase was driven primarily by higher cloud hosting costs, which we expect to continue in future periods as a direct result of our growth in cloud.

Andrew Gang: Our subscription billings also grew again by 38% in Q1 to $24 5 million.

Andrew Gang: The decline in product license revenues and support revenues continue to be offset by growth in cloud and we continue to see growth in demand for our cloud platform and anticipate this trend to continue and strengthen in the coming quarters.

Andrew Gang: Lastly cost of revenues were $34 million up 13% compared to Q1 of last year the.

Andrew Gang: The increase was driven primarily by higher cloud hosting costs, which we expect to continue in future periods as a direct result of our growth in club.

Andrew Kang: Moving on to Bitcoin. We adopted fair value accounting for our Bitcoin holdings on January 1 this year, which has fundamentally changed how we value our Bitcoin treasury assets. The left of this slide, we began the year with our Bitcoin holdings valued just under $42 billion.

Andrew Gang: Moving onto bitcoin.

Andrew Gang: We adopted fair value accounting for a big quite holdings on January one this year, which has fundamentally changed how we value our bit quaint treasury assets.

Andrew Gang: The left of this slide we began the year with a bitcoin holdings valued just under 42 billion.

Andrew Kang: On Jan 1, on adoption of the new rule, we recognize $17.9 billion to our beginning balance of retained earnings, which was the difference between the carrying value on our books and the fair value based on Bitcoin price as of 1231. One fundamental difference now under fair value accounting is that our holdings are marked on the last day of every quarter, not throughout the quarter as before. Any new Bitcoin purchased during the quarter are initially held at the purchase price of those Bitcoins and all prior quarter and new quarter purchases are fair valued as of the last day of each quarter.

Andrew Gang: On Jan one on adoption of the new rule, we recognized $17 9 billion to our beginning balance of retained earnings.

Andrew Gang: Was the difference between the carrying value on our books and the fair value based on Bitcoin price has a 12 31.

Andrew Gang: One fundamental difference now under fair value accounting is that our holdings or Mark on the last day of every quarter not throughout the quarter as before.

Andrew Gang: Any new bitcoin purchased during the quarter. Our initially held at the purchase price of those big coins and all prior quarter and new quarter purchases are fair valued as of the last day of each quarter.

Andrew Kang: In Q1, the price of Bitcoin declined from approximately $93,400 at the end of the year to roughly $82,400 at the end of Q1, resulting in a $4.9 billion unrealized fair value loss on our pre-Q1 holdings. We also purchased throughout the course of Q1 an additional 80,715 Bitcoin and an average price of approximately $94,900. representing $7.7 billion of new purchases. On the last day of Q1, because the market price of Bitcoin was approximately $82,400. These new purchases also reflected a fair value decline of about $1 billion.

Andrew Gang: In Q1, the price of Bitcoin declined from approximately $93400 at the end of the year.

Andrew Gang: Roughly $82400 at the end of Q1.

Andrew Gang: Resulting in a $4 9 billion unrealized fair value loss on our pre Q1 holdings.

Andrew Gang: We also purchased throughout the course of Q1, an additional 80715, bitcoin and an average price of approximately $94900.

Andrew Gang: Representing seven 7 billion of new purchases.

Andrew Gang: On the last day of Q1, because the market price of decline was approximately $82400. These new purchases also reflected a fair value decline of about $1 billion.

Andrew Kang: As a result, our overall Q1 unrealized fair market value loss was $5.9 billion, which flowed directly through our income statement.

Andrew Gang: As a result, our overall Q1 unrealized fair market value loss was $5 9 billion.

Andrew Gang: Which flow directly through our income statement.

Andrew Kang: The next slide is an illustration on how fair value could impact the current quarter. This waterfall chart begins with our March 31st Bitcoin holdings on the left valued at $43.5 billion. Since 3.31, we have seen a substantial recovery in Bitcoin price, which has increased since the end of Q1. using a Bitcoin price of $95,000. As an example, the change in Bitcoin price would reflect an illustrative $6.6 billion unrealized fair value gain on our Bitcoin held at the end of the previous quarter. In Q2 so far, we have purchased an additional 25,370 Bitcoin at an average price of $89,303, which represents a $2.3 billion investment.

Andrew Gang: The next slide as an illustration on how fair value could impact the current quarter.

Andrew Gang: This waterfall chart begins with our March 31, but quite holdings on the left value of $43 5 billion.

Andrew Gang: Since 331, we have seen a substantial recovery in bitcoin price.

Andrew Gang: It has increased since the end of Q1.

Andrew Gang: Using a <unk> price of $95000 as an example, the change in bitcoin prices to reflect an illustrative six 6 billion unrealized fair value gain on our bitcoin held at the end of the previous quarter.

Andrew Gang: In Q2, so far we have purchased an additional 25370 per coin at an average price of $89303, which represents a $2 $3 billion investment.

Andrew Kang: At the example price, the new Q2 purchases would reflect an increase of roughly $100 million in fair market value. In this illustration, our unrealized fair market value gain would be approximately $6.7 billion.

Andrew Gang: At the example price the new Q2 purchases, but reflected an increase of roughly $100 million in fair market value.

Andrew Gang: And this illustration, our unrealized fair market value gain would be approximately $6 7 billion and the market value of our total bitcoin held today or to reflect the fair value of approximately $52 6 billion.

Andrew Kang: And the market value of our total Bitcoin held today would reflect the fair value of approximately $52.6 billion.

Andrew Gang: Okay.

Andrew Kang: As Phong mentioned, Q1 was a milestone quarter for us with the IPOs of two new innovative Preferred Equity Offers. Strike, our 8% convertible preferred, is trading with an effective yield of roughly 9%. Since launch, Strike has delivered a 8.4% price return, outperforming the median return of all press offered since 2015. Strike is trading with an average daily volume of roughly $33 million, which is nearly 80 times the typical prep trading volumes, demonstrating strong institutional demand and a deepening market for this product, which is strengthened through a $21 billion ATM, institutional block trades and follow on retail demand.

Bob: As Bob mentioned Q1 was a milestone quarter for us with the Ipos of two new innovative preferred equity offerings.

Bob: Strike, our 8% convertible preferred is trading with an effective yield of roughly 9%.

Bob: Since launch strike has delivered eight 4% price return outperforming the median return of all products offered since 2015.

Bob: Strike is trading with an average daily volume of roughly $33 million, which is nearly 80 times a typical profit trading volumes demonstrating strong institutional demand and a deepening market for this product, which has strengthened to a $21 billion ATM institutional block trades and <unk>.

Bob: So on retail demand.

Andrew Kang: Stripe, our 10% fixed coupon perpetual preferred, has shown even stronger liquidity and investor demand and has quickly emerged as a top tier preferred instrument. With a price return of 7.5% since issuance, it has meaningfully outpaced the broader preferred market as well. Average daily volume for Stripe has been $26 million, again, significantly higher than the PeerSet. When you compare the strong BTC risk and BTC credit profiles of these prefs, there's tremendous unlock through the eventual recognition of the underlying BTC support of these instruments and the potential changes in the rate environment in the future. Both Strike and Stripe stand out as one of the most liquid and high-performing preferred stocks issued in the last decade.

Bob: Strike, our 10% fixed coupon perpetual preferred.

Bob: Joan even stronger liquidity and investor demand has quickly emerged as a top tier preferred instruments.

Bob: With a price return of seven 5% since issuance it has meaningfully outpaced the broader preferred market as well.

Bob: Average daily volume for strife, that's been $26 million again significantly higher than the peer set.

Bob: When you compare the strong BTC risk in BTC credit profiles of these perhaps there is tremendous unlock through the eventual recognition of the underlying BTC support of these instruments and the potential changes in the rate environment in the future.

Bob: Both strike and strive to stand out as one of the most liquid and high performing <unk> stock issued in the last decade.

Andrew Kang: They serve to provide innovative securities to institutional investors, insurance companies, Bitcoin longs, retail investors, as well as the broader fixed income universe.

Bob: They serve to provide innovative securities to institutional investors insurance companies, a coin longs retail investors as well as the broader fixed income universe.

Bob: Okay.

Andrew Kang: This slide highlights why we believe strike and strike are structurally superior to traditional debt. These instruments provide us with permanent capital with no maturity, no refinancing risk, no restrictive covenants, and no collateral requirements. They're also publicly listed giving us flexibility to tap follow on capital as needed, both institutionally and for retail investors. In contrast, traditional bonds comes with fixed maturities, repayment or refinancing risk and often require covenants and collateral. over a 30 year period that can lead to significant leakage from refinancing costs and added operational complexity. Our preferred equity allows us to maintain leverage without repayment risk while providing durability and scalability.

Bob: This slide highlights why we believe strike and strive for structurally superior to traditional debt. These.

Bob: These instruments provide us with permanent capital with no maturity no refinancing risk no restrictive covenants and no collateral requirements.

Bob: But also publicly listed giving us flexibility to tap along capital is needed both institutionally and retail investors.

Bob: In contrast, traditional bonds comes with fixed maturities repayment or refinancing risk and often require covenants and collateral.

Bob: Over a 30 year period that can lead to significant leakage from refinancing costs and added operational complexity.

Bob: Our preferred equity allows us to maintain leverage without prepayment risk, while providing durability and scalability.

Andrew Kang: Bitcoin is a 100 plus year asset. These instruments provide 100 100 plus year exposure.

Bob: Bitcoin is a 100 plus year asset these instruments provide a 100 100 plus year exposure.

Andrew Kang: In Q1, we issued a new $2.0 billion convertible note, which was well received by the market. The notes due March 2030 have a 0% coupon and price with a 35% conversion premium, reflecting a conversion price of $433 per share. We also redeemed our 2027 convertible notes in Q1, and our nearest debt maturity is now not until late 2028. The remainder of our scheduled debt maturities are evenly spread out through 2032 with a weighted average scheduled debt maturity of approximately 4.9 years. We now have $8.2 billion of total unsecured convertible debt outstanding with a low blended interest rate of approximately 0.42%.

Bob: In Q1, we issued a new 2.0 billion convertible note, which was well received by the market.

Bob: The notes due March 2030 have a zero percent coupon and price with a 35% conversion premium.

Bob: <unk>, a conversion price of $433 per share.

Bob: We also redeemed our 2027 convertible notes in Q1, and our nearest debt maturity is now not until late 2028.

Bob: The remainder of our scheduled debt maturities are evenly spread out through 2032 with a weighted average scheduled debt maturity of approximately $4 nine years.

Bob: We now have $8 2 billion of total unsecured convertible debt outstanding with a low blended interest rate of approximately 0.42%.

Andrew Kang: Since issuance, nearly all of our converts have increased in value significantly. On a blended basis, convertible bonds are up 62%, even outperforming Bitcoin itself. What is even more striking is Strategies Converts in comparison to other traditional securities such as US high yield and investment-paid corporates, and other US convertible models. The traditional convert market has historically offered investors such as hedge funds access to volatility across different industries and asset classes. The innovation we introduced through our converts still provide volatility, but our converts offer increased volatility through Bitcoin exposure.

Bob: Since issuance nearly all of our converts have increased in value significantly.

Bob: On a blended basis convertible bonds are up 62%, even outperforming bitcoin itself.

Bob: What is even more striking and strategies converts.

Bob: In comparison to other traditional securities such as U S high yield and investment grade corporates and other U S convertible bonds.

Bob: The traditional.

All convert market has historically offered investors such as hedge funds hedge funds access to volatility across different industries and asset classes.

Bob: The innovation, we introduced through our convert still provide volatility, but our converts offer increased volatility through bitcoin exposure.

Andrew Kang: The differentiation of our converts from others is the credit coverage that we offer, which Michael will discuss in more detail shortly. Strategy was the largest issuer of converts in 2024, and our success can be attributed to expanding the investor base of this historically closed market. In addition to traditional hedge funds, we have seen increasing participation from long only investors, and now with access for retail investors through vehicles like the BMAX ETF, the Bitcoin Corporate Treasury Convertible Bond ETF. Our outstanding debt and preferred securities, including converts, strike and strife are significantly supported by the value of our Bitcoin reserves, and even more so by the scale of our common equity market value.

Bob: The differentiation of our converts from others is the credit coverage that we offer which Michael will discuss in more detail shortly.

Bob: The strategy was the largest issue of converts issuer of converts in 2024, and our success can be attributed to expanding the investor base of this historically closed market.

Bob: In addition to traditional hedge funds we have.

Bob: See an increasing participation from long only investors and now with access for retail investors through vehicles like the BMS ETF, the bitcoin corporate treasury convertible bond ETF.

Bob: Okay.

Bob: Our outstanding debt and preferred securities, including converts strike and stripe are significantly supported by the value of our bitcoin reserves and even more so by the scale of our common equity market value.

Andrew Kang: As of April 28, we have $109 billion in equity market cap. And so we have about $100 billion in equity cushion and over $43 billion in Bitcoin cushion over our fixed income liability. The point is that we believe our capital structure is extremely well afforded.

Bob: As of April 28, we have $109 billion in equity market cap.

Bob: And so we have about 100 billion and equity cushion and over $43 billion in bitcoin cushion over our fixed income liabilities.

Bob: The point is that we believe our capital structure is extremely well.

Andrew Kang: This chart gives you a simple way to think about our capital stack across both seniority and volatility. To the far right, you'll see MSTR Equity. That's your full exposure to our high performance Bitcoin strategy. Then there's Strike, our convertible preferred. That's a step up in seniority and it pays an 8% dividend. But it also gives investors some upside through equity conversion to MSTR. Above that is Stripe, our 10% perpetual preferred. It's non convertible, non callable, and really meant for the kind of capital that wants long dated fixed income exposure to our balance sheet without the volatility of the equity.

Bob: This chart gives you a simple way to think about our capital stack across both seniority and volatility.

Bob: In the far right Youll see.

Bob: MSCI equity that's your full exposure to a high performance bitcoin strategy.

Bob: Then there is a strike our convertible preferred that the step up in seniority and it pays an 8% dividend, but it also gives investors some upside through equity conversion to MSCI.

Bob: Above that is strike, our 10% perpetual preferred it's nonconvertible non callable and really meant for the kind of capital that wants long dated fixed income exposure to our balance sheet without the volatility of the equity.

Andrew Kang: And at the top, we've got our convertible notes, senior instruments with capped upside but higher protection in the capital structure. So what you're seeing here is a full spectrum of choices, whether someone wants equity upside, yield with optionality, or pure senior exposure. That's what makes our overall capital structure so scalable. We are building a platform where investors can pick their spot on the risk return curve, and we can raise capital intelligently from each part of that.

Bob: And at the top we've got our convertible notes senior instruments with capped upside, but higher protection in the capital structure.

Bob: So what youre seeing here is a full spectrum of choices, whether someone wants equity upside yield with optionality.

Bob: Pure senior exposure, that's what makes our overall capital structure, so scalable we.

Bob: We are building a platform where investors can pick their spots on the risk return curve and we can raise capital intelligently from each part of that curve.

Andrew Kang: Thank you for your time today and for your continued support of strategy.

Bob: Thank you for your time today and for your continued support of strategy I will now turn the call over to Michael for his remarks.

Michael Saylor: I'll now turn the call over to Michael for his remarks.

Bob: Yes.

Michael Saylor: Okay, um, I want to thank everybody for being with us today. And I'm going to start with an observation. Strategy is the world's most widely held Bitcoin security. And you could think of it as the most widely held Bitcoin proxy. In fact, substantially more widely held than any of the spot ETFs in the world. We did, we did some review of that in the past few months, and we found that there are 13,000 institutions that have accounts holding MSTR. And these institutions are not just asset managers, a lot of pension funds, insurance companies, and even sovereign wealth funds.

Bob: Okay.

Bob: I want to thank everybody for being with us today.

Bob: I'm going to.

Bob: Start with an observation.

Bob: Our strategy is the worlds most widely held bitcoin security.

Bob: And you can think of it as the most widely held bitcoin proxy and fact substantially more widely how than any of the spot Etfs in the world.

Bob: We did we did some review of that in the past few months and we found that there are 13000 institutions that have accounts holding Ms. TR and these institutions are not just asset managers, a lot of pension funds insurance companies and even sovereign wealth funds.

Michael Saylor: We traced 814,000 retail accounts. And we have 500 plus ETFs and funds and indices that were embedded in like the NASDAQ 100, the Russell 1000, the MSCI index. Some of these are extraordinary. For example, the Norway Sovereign Wealth Fund, it's benefiting every single citizen of Norway. We've traced our holdings to insurance companies that have millions of beneficiaries, and pension funds that have many, many millions of beneficiaries. So all told, our best estimate is 55 million beneficiaries who are either indirect holders of MSTR or they're beneficiaries of the institutions that are invested in MSTR. We can go to the next.

Bob: <unk>.

Bob: We traced 814000 retail accounts.

Bob: And we have 500, plus Etfs and funds and indices that were embedded in like the NASDAQ100, the Russell 1000, the MSCI index.

Bob: Some of these are extraordinary for example, the Norway sovereign wealth fund, it's it's benefiting every single citizen of Norway.

Bob: We've traced we've traced our holdings to insurance companies that have millions of beneficiaries.

Bob: And pension funds that have many many millions of beneficiary. So all told our best estimate is 55 million beneficiaries, who are either indirect holders of M. S. T R or their beneficiaries of the institutions that are invested in MFS TR.

Bob: We can go to the next slide.

Michael Saylor: I'd like to talk a bit about our BTC models and you're probably familiar with BTC yield and BTC gain because we've talked about those a lot over the past six months. But in fact, I get lots of questions about how the company is going to continue to outperform Bitcoin. How are we going to continue to grow the stock? What is the basis for the premium to Nash? and in and of themselves, yield and gain only tell you part of the story.

Bob: I'd like to talk a bit about our BTC models and.

Bob: You are probably familiar with BTC yield and BTC gain because we've talked about those a lot over the past six months.

Bob: But in fact.

Bob: I get lots of questions about how the company is going to continue to outperform bitcoin how.

Bob: How are we going to continue to grow the stock what is the basis for the premium to NAV.

Bob: And.

Bob: And in of themselves yielding gain only tell you part of the story if you want to understand how we create shareholder value we have to look out.

Michael Saylor: If you want to understand how we create shareholder value, we have to look out much more than just the current period. We're looking out a decade and we're considering the consequences of all of our capital markets transactions and so we internally use a variety of these BTC metrics and I'm sharing them with you today. And I'm going to explain how we use them, how we think about them. Some of them are valuation metrics. Some of them are credit metrics. We've got some that are forecast metrics, if we go to the next slide, like volatility and ARR and then we have treasury metrics where we're calculating the value of our treasury and we have metrics that allow us to assess how accretive any particular trade or any particular transaction is at any point in time.

Bob: Much more than just the common the current period were looking out a decade and we're considering the consequences of all of our capital markets transactions and so so we internally use a variety of these BTC metrics and I am sharing them with you today and I'm going to explain how we use and how we think about them.

Bob: Some of them are evaluation metrics.

Bob: Some of them are credit metrics.

Bob: We've got some that are forecast metrics. If we go to the next slide.

Bob: Like volatility and IRR and then we have treasury metrics, where we're calculating the value of our treasury and we have and.

Bob: And we have metrics that allow us to SaaS, how accretive any particular trade or any particular transaction is.

Bob: At any point in time.

Michael Saylor: We even have some risk metrics. We have not just credit risk metrics for the credit instruments, but we have BTC risk metrics where we assess. The hurdle rates and the breakeven points of our various capital markets transaction.

Bob: We even have some risk matrix, we have not just credit risk metrics for the credit instruments, but we have BTC risk metrics, where are we where are we assess.

Bob: Our hurdle rates and the breakeven points of our various capital markets transactions.

Michael Saylor: So let's dive right in. First of all, The the degree to which any capital markets transaction is is accretive and going to create shareholder value as a function of some outlook or expectations. One thing that's really important is what do you think about BTC? Do you think that Bitcoin is going to go up 0% a year forever? And if you do, we call that a skeptic. Do you think that Bitcoin is going to track the S&P index about 10% a year or so on average? We call that a traitor. Do you think that Bitcoin looks like a magnificent seven stock or a digital a dominant digital monetary network, a Google, a Microsoft and Amazon, those normally have growth rates of 20%.

Bob: So let's dive right in.

Bob: First of all.

Bob: The the degree to which any capital markets transaction as accretive and going to create shareholder value is a function of some out.

Bob: Outlook, our expectations. One thing that's really important is what do you think about BTC do you think that bitcoin is going to go off zero percent of year forever and if you do we called out a skeptic.

Bob: Do you think that bitcoin is going to track the S&P index about 10% a year or so on average we call that a trader.

Bob: Do you think that bitcoin looks like a magnificent seven stock or a digital a dominant digital monetary network.

Bob: Google Microsoft Amazon those normally have growth rates of 20%.

Michael Saylor: We call that an investor, a tech investor, if you will. And then do you believe that Bitcoin is destined to demonetize lots of other assets as digital capital? That makes you a maximalist. My long term forecast personally that I shared last July in Nashville was that I thought Bitcoin was going to go up 29% ARR on average for the next 21 years. So you can see my forecast over the next 21 years. is about a maximalist forecast on average for a long period. If you are more aggressive than that, and in the near term, especially over the next five years, or 10 years, you might have a shorter time horizon.

Bob: We call that an investor a tech investor.

Bob: If you will.

Bob: And then do you believe that bitcoin is destined to demonetize lots of other assets as digital capital.

Bob: That makes you a maximal asked.

Bob: My long term forecast personally that I shared last last July in Nashville was that I thought <unk> was going to go up 29% IRR on average for the next 21 years. So you can see my forecast over the next 21 years.

Bob: There's about a maximized forecast on average for a long period.

Bob: If you are more aggressive than that and in the near term, especially over the next five years.

Bob: Or 10 years, you might have a shorter time horizon.

Michael Saylor: Or you might just think that the base case is conservative and you might have a more bullish case. You might be a double maxi and think a 40% gain is coming, or even a triple maxi and think a 50% a year ARR is possible. So just keep those numbers in mind as we do this analysis because the important takeaway is your view of the equity and the credit instruments. as an investor will be a function of your view of BTC.

Bob: Or you might just think that the base cases conservative and you might have a more bullish case you might be a double maxine. Thank a 40% gain is coming or even a triple maxine. Thank a 50% a year IRR as possible. So just keep those numbers in mind as we do this analysis because the important takeaway is.

Bob: Your view of the equity and the credit instruments.

Bob: As an investor.

Bob: There will be a function of your view of BTC.

Bob: Okay.

Michael Saylor: Um, so first point to be made Why do people want to hold MSTR? What drives the premium to NAV? What creates the magnetic appeal or the gravitational attraction of this asset? Well, one thing is the volatility. And we have a volatility which is higher than BTC. It is also higher than any of the S&P 500. When you have that kind of volatility, you can generate yield by simply selling that volatility. We've quantified that value of that volatility in a metric we call the MSTR rate. Think of it as the simple annualized yield you can generate by selling at the market call options with a 30-day to expiry.

Bob: So.

Bob: First point to be made.

Bob: Why do people want to hold EMS TR.

Bob: What drives what drives the premium to NAV, what creates the magnetic appeal or the gravitational attraction of this asset.

Bob: One thing is the volatility and we have a volatility which is higher than BTC. It.

Bob: It is also higher than any of the S&P 500, when you have that kind of volatility you can generate yield by simply selling that volatility.

Bob: We've quantified that value of that volatility in a metric we call the EMS TR rate.

Bob: Think of it as as the simple annualized yield you can generate by selling aftermarket call options with a 30 day to expiry.

Michael Saylor: If you just keep rolling those call options and keep selling them all the time, you generate 103% simple annualized yield on MSTR. That's substantially higher than NVIDIA or IBIT, and it's substantially higher than the NASDAQ 100. You can look at it as, again, it's like the magnetic attraction to capital. People might very well buy MSTR to sell that ball, not even knowing what BTC is, not even knowing what MSTR is. All they know is they want that 103%. Now another point that I'll make is, if you're in a taxable account, you're getting 103% yield that's taxable, and so your after-tax is going to be 70%, 60%, whatever that is.

Bob: Have you just keep rolling those call options and keep selling them all the time.

Bob: You generate a 103% simple annualized yield on M. S. TR, that's substantially higher than Nvidia or IBD and substantially higher than the NASDAQ100, you can look at it is again, it's like the magnetic attraction to capital people might very well by them.

Bob: <unk> to sell that ball not even knowing what BTC is not even knowing what MST or is all they know is they want that 103%.

Bob: Now another point that I'll make is if you're in a taxable account youre getting 103% yield that's taxable and so your after tax and it's going to be 70%, 60% whatever that is.

Michael Saylor: But if you're in a tax free account or a tax advantaged account, or it could be a retirement account, or if you're an offshore vol trader, if you're sitting in Dubai or you're sitting in in a zero income tax environment, and you reinvest this rate, you can get to 200% or more annualized So of course, that makes our security, MSTR, globally interesting to traders, and very interesting to people that would simply like to sell vol. And Another point that I'd make is that when you're considering an equity to solve vol on, what you'd like is volatility.

Bob: But if you are in a tax free account or a tax advantaged account or it could be a retirement account or if you are an offshore vol trade or if you're sitting in Dubai or you're setting in and a zero income tax environment and you invest this rate you can get to 200.

Bob: Percent or more annualized yield so of course that makes our our security EMS TR globally interesting to traders and very interesting to people that would simply like to sell ball.

Bob: And.

Bob: Another point that I'd make is that when you are considering.

Bob: Equity to solve all on what you'd like is volatility.

Michael Saylor: You would also like liquidity. You would also like durability. You want 103 vol with $5 billion of equity trading every day, and you want it to continue for a And you want credibility.

Bob: I'd also like liquidity you would also like durability, you want 103, vol with $5 billion of equity trading every day and you want it to continue for a decade.

Bob: And.

Bob: You need you want credibility, so think volatility liquidity durability credibility and now think about three classes of companies.

Michael Saylor: So think volatility, liquidity, durability, credibility. And now think about three classes of companies. Weak, struggling companies occasionally are volatile, but their underlying operating business is losing money. So they're not durable. So if you have a volatile business, and you're losing cash, it's interesting to trade for a while, but the trade doesn't stick around. And on the other hand, strong companies, well run companies, the Microsoft's of the world. They actually have a management team that engages in very decisive actions to strip the volatility away from the balance sheet and strip the volatility away from the P&L.

Bob: Weak struggling companies occasionally are volatile, but there are underlying operating business is losing money. So they are not durable. So if you have a volatile business and you're losing cash it's interesting to trade for a while but the trade doesn't stick around.

Bob: And.

Bob: On the other hand strong companies well run company so the microsofts of the world.

Bob: They actually have a management team that engages in very decisive actions to strip the volatility away from the balance sheet.

Bob: And stripped the volatility away from the P&L. So so the primary philosophy and dynamic of a well run company is to get rid of the volatility and.

Michael Saylor: So the primary philosophy and dynamic of a well-run company is to get rid of the volatility. And if you have a meme company, a meme stock of sorts, or a random company, you might get massive volatility either for a good reason or a bad reason. But the management team normally doesn't have credibility and durability. How are you going to keep it for a decade?

Bob: If you have a MIM company I mean stock of sorts.

Bob: Or a random company you might get massive volatility either for a good reason or a bad reason, but the management team normally doesn't have credibility and durability. How are you going to keep it for a decade.

Michael Saylor: And so you see what we have done is we have created a volatility engine. When you take volatility, when you take a fire and and you cultivate it, it becomes a furnace. And if you're smart, you make it a reactor, and it becomes a power plant. And of course, what we're doing is creating a crypto reactor that could run for a long, long period of time.

Bob: And so you see what we have done.

Bob: We have created a volatility engine when you take volatility when you take a fire and you cultivate it it becomes a furnace and if you're smart you make it a reactor and it becomes a power plants.

Bob: And of course, what we're doing is creating a crypto reactor that could run for a long long period of time.

Michael Saylor: So that's that rate combined with the credibility of the management team and the transparency and the durability, plus the liquidity that that actually drives and attracts a lot of capital to MSTR. Next.

Bob: So that's that rate combined with the credibility of the management team and the transparency and the durability.

Bob: <unk> liquidity.

Bob: That actually drives and attracts a lot of capital to EMS TR.

Bob: Next.

Michael Saylor: Now let's talk about equity analytics. On any given day, we consider how are we going to raise money? And how do we generate yield? How do we generate gain? How do we generate shareholder value? So, if we were to sell $100 million of MSTR equity at a multiple to NAV of two, then generally what happens is we capture a BTC dollar gain of half of that. The spread is 50%, we capture 50 million dollars of that as the gain. That is the accretive component to the existing common stock shareholders. That converts to a BTC gain of 526 Bitcoin.

Bob: Now, let's talk about equity analytics.

Bob: On any given day, we consider how are we going to raise money and how do we generate yield how do we generate gain how do we generate shareholder value.

Bob: So if we were to sell a $100 million of EMS TR equity at a multiple to NAV of two <unk>.

Bob: And then generally what happens is we capture a BTC dollar gain of half of that the spread is 50% we capture of $50 million of that is the gain.

Bob: That is the accretive component.

Bob: The existing common stock shareholders.

Bob: That converts to a BTC gain of 526 bitcoin.

Michael Saylor: that converts into a yield that is dividing our our BTC gain by our entire stack of Bitcoin works out to nine basis points. So we're capturing a yield by selling the equity and buying the Bitcoin. When we do that with convertible notes, we do it it is at a zero coupon up 40 in this model, and we're just using that to make the math simple. The same transaction with Converge would result in a 12 basis point yield, a $64 million BTC dollar gain, a 64% spread, if you will, and we get not 526 Bitcoin, but 676.

Bob: That converts into a yield that is dividing our BTC gained by our entire stack of bitcoin works out to nine basis points.

Bob: So we're capturing a yield by selling the equity and.

Bob: And buying the bitcoin.

Bob: When we do that with convertible notes, we do it as a zero coupon up 40 in this model and we're just using that to make the math simple.

Bob: The same transaction with converts would result in a 12 basis point yield of 64 million dollar BTC dollar gain of 64% spread if you will and we get not 526 declined by 676.

Michael Saylor: If we do the same thing with strike given given our general model for strike, which is an 8% dividend and 150% conversion premium. Now you're saying we're getting to a 15 basis point yield 842 Bitcoin and $80 million gain, that's an 80% spread. So you see the leverage is getting greater. That 842 Bitcoin is achieved without dilution to the common stock. So all of the capital, all of the investment income or the capital gain, if you will, from the 842 Bitcoin forever will accrue to the existing shareholders, the existing common shareholders, and not to the new strike shareholders.

Bob: If we do the same thing with strike.

Bob: Given given our general model for strike, which is an 8% dividend and 150% conversion premium.

Bob:

Bob: Now you are saying, we are getting to a 15 basis point yield 842, bitcoin and $80 million gain that's an 80% spread.

Bob: So you see the leverage is getting greater that 842, bitcoin is achieved without dilution to the common stock. So all of the capital all of the investment income or the capital gain if you will from the 842 Bitcoin forever will accrue to the existing.

Bob: <unk> the existing common shareholders.

Bob: And not to the new strike shareholders. So that's how we're creating an upside opportunity.

Michael Saylor: So that's how we're creating an upside opportunity. Now when we go to Strife, Strife is the simplest model because We're selling $100 million of a preferred, we're not diluting the common stock at all. So we've got $100 million gain of Bitcoin without any share dilution works out to 1053 Bitcoin. And that's a 19 basis point yield. So there you go. You see, as we go, as we go to more debt like instruments, we're generating less dilution, they're more creative, and they generate a higher BTC dollar gain. That we call BTC KPIs, we report that up front, we can immediately calculate these numbers.

Bob: Now when we go to strife strife is the simplest model because.

Bob: We're selling $100 million of our preferred we're not diluting the common stock at all so we've got $100 million gain a bitcoin without any share dilution works out to 1053 bitcoin.

Bob: And that's a 19 basis point yield.

Bob: So there you go you see as we go.

Bob: As we go to more debt like instrument, we're generating less dilution there are more accretive and they generate a higher BTC dollar gain that we call BTC Kpis. We report that upfront we can immediately calculate these numbers and and you're seeing them.

Michael Saylor: And, and you're seeing them generally week by week.

Bob: Generally week by week now, let's go to the next part of the analysis.

Michael Saylor: Now let's go to the next part of the analysis. Think about the next 10 years. When we sell that $100 million of equity, we capture the $50 million gain up front, okay, that's great. That is shareholder value created. But in fact, the question is, what happens over the next 10 years? And we use 10 years as a long timeframe. Most investors don't really have patience. Long time or forever is about 10 years. So you'll see a lot of analysis here that's about 10 year analytics. What you can see here is If you're a maximalist like me, and like many of our, many of our common stock shareholders are maximalist, and you crank in a 30% BTC ARR forecast, that $100 million of capital grows to be $1,379,000,000.

Bob: Think about the next 10 years.

Bob: When we sell about $100 million of equity, we capture the $50 million gain upfront.

Bob: That's great that is that is shareholder value created but in fact the question is what happens over the next 10 years and we used 10 years as a long timeframe. Most investors don't really Ah patients longtime a forever is about 10 years. So youll see a lot of analysis here, that's about 10 year analytics.

Bob: What you can see here is.

Bob: If you're a maximal us like me and like many of our many of our common stock shareholders are maximized and you crank in a 30% BTC AOR forecasts that $100 million of capital grows to be $1 $379 million and.

Michael Saylor: and Year 10. So now, what has happened? Well, we've created $50 million in gain one time, but we've actually created a lot of investment in... and half of that investment income is attributable to the equity dilution. And so the new shareholders are benefiting from it. But the other half of the investment income is captured by the common stock shareholders that existed before the transaction. So that's what we call BTC dollar income. BTC dollar income is the value that's created for the common stock shareholders of MSTR by having sold the $100 million of equity. And if you if you ask the question, well, how much value was created for the shareholders over the course of the decade?

Bob: In year 10.

Bob: So now what has happened.

Bob: Well, we've created $50 million and gain one time, but we've actually created a lot of investment income.

Bob: And half of that investment income is attributable to.

Bob: Two the equity dilution and so the new shareholders are benefiting from it but the other half of the investment income.

Bob: Is captured by the common stock shareholders that existed before the transaction. So that's what we call BTC dollar income.

Bob: BTC dollar income.

Bob: Is the value that's created for the common stock shareholders of M. S. TR by having sold the $100 million of equity and if you. If you asked the question well how much value is created for the shareholders over the course of the decade.

Michael Saylor: Well, it works out to be the gain plus the dollar income. And so you end up with value of $689 million. So we call it BTC dollar value $689 million.

Bob: It works out to be the gain plus the dollar income and so you end up with value of $689 million. So we call. It a BTC dollar value of $689 million.

Michael Saylor: Now. You can take the ratio of the value created to the capital raised. And that works out to what we call BTC torque. That's sort of a return on capital measure. What is our return on capital? 6.9 x So Why is that valuable? Well, if you want to outperform BTC then you're going to need to find a way to get leverage. So that that torque is leverage that allows the MSTR equity to outperform BTC over time. If you want to drive up the price of the value of the stock, or if you want to drive up the MSTR stock, you have to create value.

Bob: Now.

Bob: You can take the ratio of the value created to the capital raised.

Bob: And that works out to what we call BTC torque that's sort of a return on capital measure what is our return on capital six nine X. So.

Bob: Why is that valuable well, if you want to outperform BTC.

Bob: Then youre going to need to find a way to get leverage so that that torque is leverage that allows the MST our equity to outperform BTC overtime.

Bob: If you want to drive up the price of the value of the stock or if you want to drive up the MST. Our stock you have to create value and you can see right here, if we create $689 million.

Michael Saylor: And you can see right here, if we create $689 million of either gains or incremental investment income without dilution, that is the value creation. So we're creating a $6.9 of value. for every dollar of capital we raise when we do this kind of transaction.

Bob: Either gains or incremental investment income without dilution.

Bob: That is the value creation, so we're creating.

Bob: $6 $9 of value.

Bob: For every dollar of capital we raise.

Bob: When we do this kind of transaction.

Michael Saylor: Now, there's another metric you can calculate, which is a BTC multiple. And BTC multiple in this case, is equal to the total BTC NAV, like 1,379,000,000 over the equity issued. And you can see that the equity was $690 million or so. So, in this case, and this makes total common sense, right? We started with an MNAV of two, we sold $100 million of equity, half of it was a gain, you know, the the investment income and attributable to that gained amount is one half. And the investment income that's attributable to the equity dilution is the other half.

Bob: Now.

Bob: There's another metric you can calculate which is BTC multiple <unk>.

Bob: BTC multiple in this case is equal to the total BTC Nab like $1.379 billion over the equity issued.

Bob: And you can see that the equity was $690 million or so so in this case and this makes total common sense right.

Bob: We started with an <unk> of two we sold $100 million of equity half of it was again.

Bob: Now.

Bob: The investment income and the attributable to that gained amount is one half and the investment income that's attributable to the equity dilution is the other half.

Michael Saylor: Now, I think that if you look at this BTC multiple, that will tend to set the floor for MNAV. It's not the ceiling. It's not necessarily the average there. There are about a dozen other factors that drive a premium to BTC and they drive the MNAB North. One of them, in isolation, is our equity sales. or our equity financing here. And so Yeah, focus upon the two BTC multiple and you know, think that if we do a lot of capital markets activity around a two multiple, that will tend to drive the MNAV toward or above or keep it above two.

Bob: Now.

Bob: I think that if you look at this BTC multiple that will tend to set the floor for <unk>, it's not the ceiling.

Bob: It's not necessarily the average there.

Bob: There are about a dozen other factors that drive a premium to BTC and they drive them Nab north one of them in isolation.

Bob: And as our equity sales.

Bob: Or our equity financing here and so.

Bob: Yet focus upon the two BTC multiple and think that if we do a lot of capital markets activity around it to multiple that will tend to drive them.

Bob: Toward or above or keep it above two.

Michael Saylor: And The degree of impact it has, of course, is a function of how fast we raise capital and the amount of capital we raise relative to the existing Bitcoin net.

Bob: And.

Bob: The degree of impact. It has of course is a function of how fast we raised capital and the amount of capital we raise relative to the existing bitcoin NAV.

Michael Saylor: Now, um, there are there are three possible objectives of our capital markets activity. The first and the principal objective is drive up the price of MSTR. Second, outperform BTC. Third, increase the MNAT. And if you think about it, you said, well, which one do you want the most? Well, you want the price of MSTR to be maximized. But the other two are consistent with it. And and how are we going to do these things? Well, it's a function of raising capital at a high spread such that we create shareholder value at the fastest possible rate.

Bob: Now.

Bob: There is there are three possible objectives of our capital markets activity. The first and the principal objective is drive up the price of M. S. TR second.

Bob: Outperform BTC third.

Bob: Increase the <unk>.

Bob: <unk> and.

Bob: And if you think about it you said, while which one do you want the most while you want the price of M STR to be maximized.

Bob: But the other two are consistent with it.

Bob: And how are we going to do these things, while it's a function of raising capital at a high spread such that we create shareholder value at the fastest possible rate.

Michael Saylor: So bear in mind, this charts the baseline.

Bob: So bear in mind this charge the baseline now let's go ahead and look at what happens if we substitute convertible bonds.

Michael Saylor: Now let's go ahead and look at what happens if we substitute convertible bonds. Well, the converts have 40% leverage in them. And so what you can see here is that our torque goes up to 8.9. So there's a lot more torque on this almost almost $9 of value creation for every dollar a capital raise. or $9 of BTC dollar value for every dollar capital raise. And you see the BTC multiple moves to 2.8. So that's going to tend to drive up or support a much higher MNAV. It's also going to tend to create more BTC dollar income for the CommaSoc shareholders.

Bob: Well the converts hub, 40% leverage on them.

Bob: And so what you can see here.

Bob: Our torque goes up to eight nine so theres a lot more torque on this almost almost $9 of value creation for every dollar of capital raised.

Bob: $9 of BTC dollar value for every dollar of capital raise and you see the BTC multiple moves to two eight.

Bob: So that's going to tend to drive up or support a much higher M. NAV. It's also going to 10 <unk>.

Bob: And to create more.

Bob: More BTC dollar income.

Bob: For the common stock shareholders.

Michael Saylor: Now let's go to what happens if we got a strike. at strike, you can see we have a higher premium. And so now the torque is even increasing the return on capital looks even more impressive, of course, 150% premium ought to do that. And what you can see is the is the expected equity dilution. And this is the theoretical equity dilution is much lower, the BTC multiple goes to four, you could imagine that tons of financing of strike will tend to justify an MNAV of more than four, if we can, if we can change this to be a substantial to our capital raises.

Bob: Now, let's go to what happens if we got to strike.

At strike you can see we have a higher premium and so now the torque is even increasing the return on capital looks even more impressive and of course, the 150% premium audit do that.

Bob: And what you can see is the is the expected equity dilution and this just a theoretical equity dilution as.

Bob: Is much lower the BTC multiple goes to four you could imagine that tons of financing of strike will tend to justify an M. NAV up more than four if we can if we can change this to be a substantial mix to our capital raising.

Michael Saylor: on an isolated basis.

Bob: On an isolated basis.

Unknown Attendee: Bowser Jr, Unknown Attendee, Andrew Kang, Shirish Jajodia, Trish Regan, MicroStrategy Inc A couple of other dynamics here. One, one point I make is this is really on an isolated basis. And it's a theoretical calculation, because as a practical matter, the $340 million of equity you see in year 10 is sitting in the strike instrument. And if strike is generating a dividend, it's quite likely that people that buy strike will never want to convert strike into They have the right to do so. But they may not do it. So so this is an example of a theoretical equity dilution.

Bob: Now there.

Bob: Couple of other dynamics here.

Bob: One point I'd make is this is really on an isolated basis and its a theoretical calculation because as a practical matter the $340 million of equity you see in your 10 is sitting in the strike instrument and if strike is generating a dividend, it's quite likely that people that buy strike will remember it.

Bob: Want to convert strike into equity.

Bob: Have the right to do so but they may not do it. So so this is an example of.

Bob: A theoretical equity dilution, but practically speaking you are getting a lot of leverage from this instrument.

Unknown Attendee: But practically speaking, you're getting a lot of leverage from this instrument, because you're attracting a new class of investors. And they don't want to actually convert this to pure equity if they're buying it in order to hold it for the liquidation preference and the dividend. But you can see torque is improving multiples improving and we're generating $10 of BTC dollar value for every dollar capital that we Now, let's talk about Stripe. So the torque for Strife increases to 12.8. You see a lot of torque because at the end of the 10 years, you've only issued $100 million of equity.

Bob: Because you are attracting a new class of investors and they don't want to actually convert this to pure equity if they are buying it in order to hold it for the liquidation preference and the dividend.

Bob: But.

Bob: You can see torque is improving multiples improving and were generating $10 of BTC dollar value for every dollar of capital that we raise.

Bob: Now, let's talk about strife.

Bob: So the torque for strife increases to 12 eight you see a lot of talk because at the end of the 10 years, you've only issued $100 million of equity that's equity that we assume we issue to pay the dividends, we've got $137 billion of Nab.

Unknown Attendee: That's equity that we assume we issued to pay the dividend. We've got $1.37 billion of NAF. What's interesting here is you see the BTC multiple goes to 13.8. So Strife is incredibly leveraging to the common stock shareholders, and it generates a potentially extremely high return on asset and extremely high return on equity. Now, let's look at broader cases here. Coming back to my chart. You can see that when we do these transactions. Only a small part of the story is the BTC gain, right? $50 million worth of gain immediately, but we're looking at $639 million as the share of BTC, of investment income attributable to the shareholders, you know, without expected dilution.

Bob: What's interesting here is you'll see the BTC multiple goes to $13 eight.

Bob: So strife is incredibly leveraging to the common stock shareholders and and it generates potentially extremely high return on asset and extremely high return on equity.

Bob: Now, let's look at a broader cases here.

Bob: Coming back to my chart.

Bob: You can see that when we do these transactions.

Bob: Only a small part of the story is the BTC gain right $50 million worth of gain immediately but we're looking at $639 million as the share of BTC of investment income attributable.

Bob: And to the shareholders.

Bob: Without expected dilution so the real BTC dollar value of 689 million of which less than 10% of it is the gain upfront.

Unknown Attendee: So the real BTC dollar value, $689 million, of which less than 10% of it is the gain up front. Most of the leverage, you can see, is really coming on the back end of the transaction. And you can see as we go to the right, you know, you're getting to substantially larger value creation 800 million, a billion 1.3 billion. That's all assuming a 10 year time horizon 30% AR and two times nav. Now let's look at other cases. I'm going to show you BTC torque for one time. If we were to sell equity at one times MNAV, then you can see there isn't any Right, yeah, you know, if you're basically selling the equity at the MNAV You're not really creating shareholder value on an isolated basis.

Bob: Most of the leverage you can see is really coming on the back end of the transaction.

Bob: And you can see as we go to the right you know.

Bob: Youre getting to a substantially larger value creation $800 million 1 billion $1 3 billion. That's all assuming a 10 year time horizon, 30% IRR and two times NAV.

Bob: Now, let's look at other cases.

Bob: I'm going to show you a BTC torque for one times nap, if we were to sell equity at one times M. NAV.

Bob: Then you can see there isn't any torque right yet if you're basically selling the equity at the M. NAV.

Bob: Youre not really trading shareholder value on an isolated basis that is the first order result of the capital market transaction is simply to expand the equity capital of the company by.

Unknown Attendee: That is the first order result of the capital market transaction is simply to expand the equity capital of the company. By the way, that's not necessarily a bad idea, you might be expanding the equity capital of the company making the other credit instruments more credit worthy, you might increase liquidity, you might actually increase volatility because of name recognition and for a lot of other second order reasons. on an isolated basis, you're not generating torque here. If you look at the convertible notes You generate a little bit of torque, you can still generate some torque. And if you're a maximalist, you expect 30% ARR, you're going to generate a 3.9 torque $4 for every dollar capital raise.

Bob: Alright, thats not necessarily a bad idea you might be expanding the equity capital of the company, making the other credit instruments more creditworthy you might increase liquidity you might actually increase volatility because of name recognition and for a lot of other second order reasons, but.

Bob: On an isolated basis youre not generating torque here if you look at the convertible notes.

Bob: You generate a little bit of torque you can still generate some torque and if you're a maximal I shouldn't expect 30% IRR youre going to generate a $3 nine torque $4 for every dollar of capital ratio. So you can generate shareholder value using convertible financing. If you are very bullish on bitcoin.

Unknown Attendee: So you can generate shareholder value using convertible financing if you are very bullish on Bitcoin. When you go to strike, it becomes easier, you know, for strike, you can see you're generating a lot of shareholder value here, even just as a trader with a more skeptical outlook, and the torque increases a bit faster. But of course, you know, the real strategy if you've got a low m nav to get the engine going is you're selling strife because strife is generating extreme torque strife is generating 13 x $13 for every dollar a capital raise, even with m nav of one.

Bob: When you got to strike it becomes easier for strike you can see you're generating a lot of shareholder value here, even just as a trader with a more skeptical outlook and the torque increases.

Bob: I'll bet faster.

Bob: But of course.

Bob: The real strategy, if you've got a low M NAV to.

Bob: To get the engine going as you're selling strikes because strife is generating extreme torque strife is generating 13 ex $13 for every dollar of capital raise.

Unknown Attendee: And so you see the strife numbers go from, you know, from 1.6 as a trader all the way up to 56 x. if you're a triple maxi. So that's our one MNAB chart. Let's look at it for for other multiples. Here's two MNABs. Now what you see here is when you get to two times MNAV, you can generate pretty decent torque with the equity $7 for every dollar capital raise. You can generate a lot more with the converts. Unknown Speaker 3 You can generate a ton with strike. And then strife, you know, what you'll notice is the torque is exactly the same.

Bob: Even with M. NAV of one and so youll see the strife numbers go from you know from one six is the trade are all way up to 56 acts of your Triple Maxi. So that's our one M. Nab chart, let's look at it for for other multiple adheres to them now.

Bob: Now what you see here is when you get to two times M. NAV, you can generate pretty decent torque with the equity $7 for every dollar of capital raised you can generate a lot more with the converts.

Bob: You can generate a ton with strike and then strife what youll notice is the torque is exactly the same. It is it is invariant to the right. It's just a it's a pure fixed income instrument.

Unknown Attendee: It is it is invariant to the MNAB, right? It's just a it's a pure fixed income instrument. Now let's go to three times. Now you see it three times MNAV, you're starting to generate a, you know, $9 for every dollar capital raised, you know, over the 10 years if you're a maximalist. And, and of course, that really improves the returns of convertible notes and strike dramatically. And you know what doesn't get any better? Strife, right? Strife torque is exactly the same regardless of what the MNAV is. But you see that it's getting easy to generate torque with MSTR and convertible notes as the MNAV.

Bob: Now, let's go to three times that map.

Now you see it three times, then youre starting to generate a $9 for every dollar of capital raised over the 10 years of Euromaximalist and and.

Bob: Of course that really improves the returns of convertible notes and strike dramatically and you know it doesn't get any better strife right strife torque is exactly the same regardless of what the NAV is but you see that it is getting easy to generate torque with MST on convertible notes of <unk> increases.

Unknown Attendee: MNAV in Now, let's take a look at BTC Multiple. This is also instruct So you're sitting with a multiple of one, your BTC MNAV is, or BTC NAV is equal to your BTC equity. And what you can see is it doesn't really matter what your outlook is for BTC, your multiple is one. And with converts, it's 1.4. And with strike, it's gonna go, there is a little bit of sensitivity. You can get up to a 2.3, you know, a 2.3 multiple to 2.4. You can see when MNAV is pretty low, you have to go to strike or to stripe.

Bob: Now, let's take a look at our BTC multiple.

Bob: This is also instructive.

Bob: So you are sitting with an M. A multiple of one <unk> BTC.

Bob: Novice.

Bob: BTC NAV is equal to your BTC equity and what you can see is it doesn't really matter. What your outlook is for BTC. Your Baltimore, one and with converts just 1.4 and was strike it's going to there's a little bit of sensitivity you can get up to a 2.3.

Bob: Al.

Bob: Two three multiple the two four and you can see when them now is pretty low you have to go to strike or the strike, but now look at strife look at the BTC multiples for that Youre going from one to 57, and if youre a bitcoin maximalist than you think youre going to get 30% are you getting 13 eight multiple you could.

Unknown Attendee: But now look at stripe, look at the BTC multiples for that. You're going from one to 57. And if you're a Bitcoin maximalist, and you think you're gonna get 30% ARR, you're getting 13.8 multiple. You could imagine driving the MNAV up, you know, from two to three to four to five to six using stripe type financing, you know, even when the MNAV is one, right? The MNAV could be one, but the issue is how much capital do you have? How much Bitcoin do you have that's collateral? Because if you have a lot of Bitcoin that serves as collateral, and you can sell a lot of stripe or other kinds of currency swaps or fixed income instruments, you're going to actually put leverage back into the capital structure.

Bob: Magin driving the M. NAV up you know from two to three to four to five to six using strife type financing.

Bob: Even when the M. NAV is one right now.

Bob: It could be one but the issue is how much capital do you have how much <unk> do you have that as collateral because if you have a lot of bitcoin that serves as collateral and you can sell a lot of strife or other kinds of currency swaps or fixed income instruments youre going to actually put leverage back into the capital structure and you're going to drive that.

Unknown Attendee: And you're going to drive that MNAV back up. And of course, you're going to drive out performance against BTC as well. Let's look at two. when MNAB goes to two. Well, now you can see the equity's pretty, you know, it's pretty predictable, two X, no matter what your BTC forecast is. And Stripe is pretty predictable as well, but the convertible notes start to become more effective and Stripe becomes a lot more effective when you're doing that capital raising at two. And at three. Now you see convertible financing at two at three and you might very well put a floor of four or five MNAB underneath the stock and would strike you getting to numbers like four or five, six.

Bob: NAV back up and of course, you are going to drive.

Bob: You are going to drive outperformance against PTC as well.

Bob: Let's look at <unk> two.

Bob: When <unk> goes to two well now you can see the equities pretty.

Bob: It's pretty predictable to ask no matter what year BTC forecast is and.

Bob: Strife is pretty predictable as well, but the convertible notes start to become more effective and strike becomes a lot more effective when you're when you're doing that capital raising at two and three.

Bob: Now you see convertible financing at two three and you might very well put a floor of four five.

Bob: Underneath the stock and with strike Youre getting to numbers like 456.

Unknown Attendee: with Strife. Of course, Strife doesn't really care. So this gives you a sense of the sensitivities of BTC torque and BTC multiples to MNABs. Now let's try to chart it. We've got a yield curve and I'm showing you the BTC yield curve and But as the MNAV increases, the yield curve flattens. And of course, you can see, you know, at a yield at an MNAV of two, you're getting decent healthy yield across all parts of the yield curve. And as the MNAV increases, and it flattens, then you can see the yields on the equity and the convertible equity instruments start to approach the yields from the hard, you know, from strike and from strife.

Bob: Strife of course stripe doesn't really care.

Bob: So this gives you a sense of the sensitivities of BTC torque and BTC multiples to M labs now, let's try to charter.

Bob: Yeah.

Bob: We've got a yield curve and I am showing you the BTC yield curve and.

Bob: On one side of the yield curve is strife and what you can see is.

Bob: I've created the yield curves for various <unk> ranging from one to two to three to four to five so when the <unk> is one you've got a very steep yield curve and you can see here that that youre getting Max Yao with strife and somewhat strike and then you're getting a bit with the converts I mean, they all were.

Bob: And then you see the equity isn't generating any BTC yield.

Bob: But as the <unk> increases the yield curve flattens and of course, you can see at a yield at an <unk> of two youre getting decent healthy yield across all parts of the yield curve and as the <unk> increases and it flattens then you can see the yield.

Bob: <unk> on the.

Bob: The equity in the convertible equity instruments start to approach the yields from the hard from striking from strife.

Unknown Attendee: And this is important to keep in mind. Let me convert that to spreads for you. Spread is the percentage of the capital we raise that results in a gain to the shareholders. That is, how much of the capital is an accretion. If I've got a spread, I've got an MNAV of 5, that means when I sell $100 million worth of equity, $80 million is the value of the gain. And so our shareholders are capturing 80% of that capital, right, the 80% spread. So you can see here that, you know, Stripe is a 100% spread instrument.

Bob: This is important to keep in mind.

Bob: Let me convert that to spreads for you.

Bob: Okay.

Bob: Spread is the percentage of the capital we raise.

Bob: That results in a gain to the shareholders that is how much of that capital is an accretion you know if I have got a spread I've got a M. NAV of five that means when I saw $100 million worth of equity $80 million is the value of the gain and.

Bob: So our shareholders are capturing 80% of this of that capital rates, 90% spread. So you can see here that you know strife is 100% spread instrument.

Unknown Attendee: Stripe generates spreads anywhere from 60% to 92% based upon the MNAVs. The converts will generate spreads from 29% to 86%. And of course, MSTR, if the MNAV is 1, it generates no spread. But when the MNAV is 2, it's 50% spread. There's a pretty big difference between 2 and 1, massive difference. When you get to 3, it's 67% spread. And that is two-thirds of all the capital you raise is a gain generating yield for the shareholders. And that yield is what allows us to outperform. Why don't we go to the next one? So you're asking the question probably, well, this is all well and fine.

Bob: Strike generate spreads anywhere from 60% to 92%.

Bob: Based upon the M knobs that converts will generate spreads from 29% to 86% and of course MST or if the <unk> is one that generates no spread.

Bob: But when you have nervous too is 50% spread there is a pretty big difference between two and one massive difference when you get to three at 67% spread and that is two thirds of all the capital you raised is again generating yield for the shareholders and that yield.

Bob: It's what allows us to outperform.

Speaker Change: Why don't we go to the next slide.

Speaker Change: So youre asking the question probably well this is all well and fine if I'm selling these fixed income instruments I'm getting a higher yield on generating a higher spread but whats the risk <unk>.

Unknown Attendee: If I'm selling these fixed income instruments, I'm getting a higher yield, I'm generating a higher spread, but what's the risk? You've got an 8% coupon or dividend on strike, you've got a 10% dividend on strife. So we think about what is the hurdle rate that we have to overcome in order to avoid missing our numbers, or in this case, if I report that we generated 100% spread on strife, and we show you BTC gain equal to a hundred million dollars. Well, under what circumstances would that not be true in a day? And the answer is, as long as BTC AR is north of 7.2%, then that gain holds.

Speaker Change: <unk> got an 8% coupon or dividend on strike, you've got a 10% dividend on strife. So we think about what is the hurdle rates.

Speaker Change: That we have to overcome in order in order to avoid.

Speaker Change: Missing our numbers or in this case.

Speaker Change: I report that we generated a 100%.

Speaker Change: 100% spread on strife.

Speaker Change: And we show you BTC gain equal to $100 million.

Speaker Change: Under what circumstances would that not be true in a decade and the answer is as long as BTC is north of seven 2% and that gain holds so in essence, the hurdle rate of seven 2% for strife.

Unknown Attendee: So, in essence, the hurdle rate is 7.2% for strife. The hurdle rate for strike is 6.1%. The hurdle rate for the converts is 2%. And the hurdle rate for the equity, intuitively, this should not be surprising, is 0%. As long as Bitcoin is appreciating more than 0%, then there will have been a gain and a yield on an equity transaction. And so generally, most of our equity investors expect BTC to appreciate more than 7.2%. And as I said, the maximus thinks 30%. So generally, if you believe BTC is going up 10, 20, 30%, most of the financing we're doing is comfortably above these hurdle rates, which means that when we say we generated a, you know, a BTC yield of some percentage or a BTC gain of something, I think you can be comfortable that it's a it's a reasonable metric for you to take into account.

Speaker Change: Hurdle rate for strike is six 1%.

Speaker Change: The hurdle rate for the converts as 2%.

Speaker Change: And the hurdle rate for the equity intuitively there should not be surprising is zero percent as long as bitcoin is appreciating more than zero percent. Then there will have been again added yield on an equity transaction.

Speaker Change: And so generally most of our equity investors expect BTC or appreciate more than seven 2%.

Speaker Change: And as I said, the maximize things, 30%. So generally if you believe btc's going up 10 20, 30% you know most of the financing. We're doing is comfortably above these hurdle rates, which means that when we say we generated.

Speaker Change: BTC yield of some percentage or a BTC gain of something I think it can be comfortable that it's a it's a reasonable metric for you to take into account.

Unknown Attendee: Now, let's think about break even. Under what circumstances would it be a mistake to have done any of these financings? Or another way to say it is, are there any circumstances under which we don't create shareholder value? I'm using a 10-year time frame. And so I'm going to show you some numbers. If we sell equity at one times MNAV, and the price of BTC is $95,000. The breakeven price is $95,000 in 10 years, and the BTC ARR, or the breakeven rate, is 0%. That's kind of common sense. Now, what if I sell it in MNAB of two?

Speaker Change: Now, let's think about breakeven.

Speaker Change: Under what circumstances would it be a mistake.

Speaker Change: Two have done any financings or another way to say it is are there any circumstances under which we don't create shareholder value.

I'm using a 10 year timeframe.

Speaker Change: So I'm going to show you some numbers if we sell equity at one times M Nab and the price of BTC is 95000.

Speaker Change: The breakeven price is 95010 years and the brand the BTC.

Speaker Change: Our our or the breakeven rate is zero percent.

Speaker Change: That's kind of common sense.

Speaker Change: Now what if I saw it in <unk> of two <unk>.

Unknown Attendee: Well, the breakeven price drops to 47,000. Bitcoin could decrease 6% a year for a decade, and you would still be better off as a common stock shareholder with us having done that transaction. So in fact, when we're selling equity at MNABs of two, three, four, five, we're de-risking the company. We're not increasing the risk. And so you can see here, I've got the breakeven prices and the breakeven rates for the equity for the converts. I've got it for strike. I've got it for strife. It's kind of a bit of a surprise. This is a breakeven price for equity over the 10 years.

Speaker Change: Well the breakeven price drops to 47000, bitcoin could decrease 6% a year for a decade and you would still be better off as a common stock shareholder with us having done that transaction. So in fact, when we're selling equity at <unk> of 2345, where DRAM.

Speaker Change: Skiing.

Speaker Change: The company, we're not increasing the risk and so you can see here.

Speaker Change: I've got the breakeven prices in the breakeven rates for the equity for the converts Ive got it for strike Ive got it for strife.

Speaker Change: Common it's kind of a bit of a surprise, but you know.

Speaker Change: We saw we saw a lot of strife.

Speaker Change: <unk> attach a 10% dividend to it but it turns out that even if a bitcoin goes up zero percent of year, we're still breaking even over the 10 years. So.

Speaker Change: So we're not actually taking I think as much risk as it might be perceived by our.

Speaker Change: Traditional.

Speaker Change: Investor who doesn't really think hard about what's going on here. Let me show you some pictures to make this easier.

Speaker Change: This is a breakeven price for equity over the 10 years and what you can see is that if you thought the bitcoin was going to go down to 65000, a coin over 10 years and you had a chance to sell it at two times M. NAV you should do it.

Unknown Attendee: And what you can see is that if you thought that Bitcoin was going to go down to 65,000 a coin over 10 years, and you had a chance to sell it at two times MNAV, you should do it. Right whenever a BTC treasury company, a BTC company is selling at 2345 times MNAB, they're de-risking the entire value proposition for their investors, they're not increasing risk at all. And you can see, if you get a chance to actually sell equity at five times MNAB, Bitcoin could crash to 20,000 a coin, and you would have created shareholder value having done it over a decade.

Speaker Change: Right whenever a BTC Treasury company, a BTC company is selling at 2345 times I am now, they're derisking the entire value proposition for their investors, they're not increasing risk at all and you can see if you got a chance to actually sell equity at five times am NAV.

Speaker Change: Bitcoin could crash to 20000, a coin and you would have created shareholder value having done it over a decade.

Unknown Attendee: Let's go to the next slide. This shows that same break-even price for convertible notes. And as you can see, it's a lot less risky than you might think it is. I mean, you're staring at the numbers. Bitcoin can literally go down, and you would have wanted to have done this. And this is on an isolated basis, too. That is to say, we're just isolating this transaction. We're not considering the second and third order benefits of having raised billions of dollars of capital. If you raise extra capital, you get more liquidity. You might get more volatility.

Speaker Change: Let's go to the next slide.

Speaker Change: This shows.

Speaker Change: That same breakeven price for convertible notes and as you can see it's really.

Speaker Change: It's a lot less risky than you might think it is I mean, you're staring at the numbers Bitcoin can literally go down and your you would have wanted to have done. This in and this is on an isolated basis to that is to say, we're just isolating. This transaction, we're not considering the second and third order benefits of having raised billions of dollars of capital.

Speaker Change: If you raise extra capital you get more liquidity you might get more volatility the ball will go up people will comment it will increase the MST are right it'll attract new capital et cetera.

Unknown Attendee: The vol will go up. People will come in. It'll increase the MSTR rate. It'll attract new capital, etc. So there's a lot of integrated benefits from this. But on an isolated basis, there's the break-even price. Let's go to the next. So you see with Strike... The breakeven price is a function of MNAV. And it's a lot less correlated than the equity is. But you can see the higher the MNAV, the less risk there is. And the truth is, you know, when you're doing a transaction like this, it's, you know, it's, it's kind of beneficial to you under most circumstances, a de-risk the balance sheet.

Speaker Change: There's a lot of integrated benefits from this but on an isolated basis, you know theres a theres the breakeven price, let's go to the next.

So you see what strike.

Speaker Change: The breakeven price is a function of M Nab and it's a lot less correlated than the equity is but you can see the higher the M. NAV the less risk there is and the truth is.

Speaker Change: When youre doing a transaction like this it's a.

Speaker Change: It's kind of beneficial.

Speaker Change: To you under most circumstances it de risks the balance sheet next.

Unknown Attendee: Next. And of course, Strife. This is very simple. 85,000 85,000 right doesn't matter what the m nav is, doesn't and you can figure out that if you think that BTC is going up in value, then probably this is a good idea of it's going down is probably not a great idea. Let's go to the So now I'm going to talk about, you know, the hundred billion dollar question, which is, why does MSTR trade at a multiple to BTC-NAV? And, and, you know, there's a lot of misconceptions about this. And people, you know, you hear all sorts of things.

Speaker Change: And of course strife this is very simple.

Speaker Change: 85080 5000.

Speaker Change: It doesn't matter what the NAV is doesn't and you can figure out that if you think that BTC is going up in value. Then probably this is a good idea if it's going down is probably not a great idea.

Speaker Change: Let's go to the next.

Speaker Change: So now I'm going to talk about you know the $100 billion question, which is why does M. S. TR trade at a multiple to BTC NAV and and you know Theres a lot of misconceptions about this and people you hear all sorts of things.

Unknown Attendee: People think, you know, they don't really understand why. And I think I'd like to share some of my observation as to why. first of all. MSTR, the security has a compliance advantage over BTC, the commodity or BTC spot ETFs for many investors, many classes, many investors, either they have their money locked up in funds, where they're they're not allowed by the trustee or or the custodian to buy BTC, they there are many wealth managers that won't let you buy the ETFs. There are countries like in the UK, where there are examples where they would let you buy MSTR, but you couldn't buy BTC.

Speaker Change: People think you know they don't really understand why and.

Speaker Change: I think I'd like to share some of my observation is as to why.

Speaker Change: First of all.

Speaker Change: M S T R. The security as a compliance advantage over BTC, the commodity or BTC spot Etfs for many investors many classes many investors.

Speaker Change: Either they have their money locked up in funds, where they are they're not allowed by the trustee or or the custodian to buy BTC.

Speaker Change: There are many wealth managers that wont, let you buy the Etfs.

Speaker Change: There are countries like in the UK, where there are examples where they would like <unk>, but you quoted by BTC.

Unknown Attendee: There are places, you know, there are many, many brokers, they will let you buy MSTR, they won't let you buy the BTC spot ETF. So when the security has a compliance advantage, then there are pools of capital that are going to buy it because their choice is to not get any BTC exposure or to do it through MSTR. That creates a premium to NASA. The second point. MSTR is a credit advantage to BTC. If I have an if I have a security trading on the NASDAQ, that's deeply liquid, I could borrow against it via margin loan, maybe I get a SOFR plus 100 basis point loan.

Speaker Change: There are places you know there are many many brokers they will let you buy M. S. T R. They won't let you buy the BTC spot ETF.

Speaker Change: So.

Speaker Change: When the security has a compliance advantage than there are pools of capital that are going to buy it because there are choices to not get any BTC exposure or to do it through M. S. T. R that creates a premium to NAV.

Speaker Change: The second point.

Speaker Change: MSCI is a credit advantage to BTC.

Speaker Change: If I haven't if I have a security trading on the NASDAQ that's deeply liquid I could borrow against it via margin loan maybe I get a sofa plus 100 basis point alone that means that you know I have I have a lot of capital and now it's like what I can borrow against it from a big bank that I Trust.

Unknown Attendee: That means that, you know, I have I have a lot of capital and now it's liquid, I can borrow against it from a big bank that I trust. I can't borrow at SOFR plus 100 basis points against BTC from my Morgan Stanley or JP Morgan or Bank of America or fill in the name of a big bulge bracket bank. So I can't get margin loans on BTC at all. And in most cases, you can't get a margin loan against BTC spot ETFs. It's very, very hard to find people that will extend margin credit. So this this impacts the market in two ways.

Speaker Change: <unk>.

Speaker Change:

Speaker Change: I can borrow at sofa, plus 100 basis points against BTC from my Morgan Stanley or Jpmorgan or bank of America or fill in the name of <unk>.

Speaker Change: Big Bulge bracket banks, so I can't get margin loans on BTC at all and and in most cases, you can't get a margin loan against BTC spot Etfs is very very hard to find people that will extend margin credit. So this.

Speaker Change: This impacts the market in two ways.

Unknown Attendee: One, I could buy a bunch of MSTR and hold it forever and just live off of loans that I take against it. Wallet appreciates. And and that's a nice strategy. The other way it impacts is if I had a portfolio with you know, fill in the blank if I had $100 million of equities I could buy a million dollars of MSTR borrowing the money from my prime broker with no cash down. So people can buy and leverage into a company that has a credit advantage, and then they can borrow against it and margin it. and so you have to ask the question if you live in a neighborhood and the houses on the left side of the street are eligible for Fannie Mae or Freddie Mac mortgages and the houses on the right side of the street you have to pay cash for and you can't put a mortgage on all things being equal if the two houses are identical on either side of the street which house is going to have the higher price I don't think it's complicated to figure out that if I can borrow the money to buy the house on the left side of the street, I'll pay more for that house because there's no money down and there's 20% deposit.

Speaker Change: One <unk>.

Speaker Change: I could buy a bunch of M S TR and hold it forever and just live off of loans that I take against it.

Speaker Change: Wallet appreciates.

Speaker Change: And that's a nice strategy the other way it impacts us if I had a portfolio with.

Speaker Change: You know filling the blank if I had a $100 million of equities.

Speaker Change: I could buy a $1 million of M. S. T. R borrowing the money from my Prime broker with no cash down so people can buy and leverage into a company that has a credit advantage and then they can borrow against it in margin it.

Speaker Change: And so you'll have to ask the question. If you live in a neighborhood and the houses on the left side of the street are eligible for Fannie Mae or Freddie Mac mortgages and the houses on the right side of the Street you have to pay cash for and you can't put a mortgage on all things being equal if the two houses are identical on either side of this.

Speaker Change: Street, which house is going to have the higher price.

Speaker Change: I don't think it's it's complicated to figure out that if I can borrow the money to buy the house on the left side of the street I'll pay more for that house, because there's no money down and it was 20% deposit and if I have to come up with cash to buy the house on the right side of the street I'm going to offer less as a cash buyer because it takes me 20 extra years of my life.

Unknown Attendee: And if I have to come up with cash to buy the house on the right side of the street, I'm going to offer less as a cash buyer because it takes me 20 extra years of my life to come up with cash. I mean, it's not complicated, right? It's financeable. And BTC is not really being financed. I don't know of any major bank in the world that will finance BTC. And it's very, very difficult to find anybody that will finance BTC spotty. So let's go to the third point. MSTR has a higher volatility than BTC.

Speaker Change: To come up with the cash I mean, it's not complicated right.

Speaker Change: It's financed symbol.

Speaker Change: And BTC is not really being financed I don't know of any major bank in the world that will finance BTC and I and it's very very difficult.

Speaker Change: Tough to find anybody that will finance BTC spot Etfs.

Speaker Change: So let's go to the third point.

Speaker Change: MST or has a higher volatility and then BTC.

Unknown Attendee: And we talked about it, you know, if Bitcoin is trading with a vol of 50, we'll often be times be 80. If it's 60, we might be 90. That results in a higher MSTR rate than say, the IBIT rate. That means that you have a larger, deeper, richer options market. Why would I want to accept 60% when I could get 100%? Right? I mean, it's very simple apples to thing. So the volatility drives the options market drives the yields attracts capital. The next point I'll make is that the options, they have that higher simple annualized interest rate for those selling vol.

Speaker Change: And we talked about it you know a big client and its trading with of all of 50 will often be times be 80, if it's 60, we might be 90 that results in higher M. S TR rate than say the IBM right.

Speaker Change: That means that you have a larger deeper richer options market.

Speaker Change: Why would I want to accept 60% when I could get 100% right I mean, it's very simple apples to apples thing.

Speaker Change: So the volatility drives the options market drives the yields attracts capital.

Speaker Change:

The next point I'll make is that the options. They have they have that higher simple annualized interest rate for those selling vol and that makes it possible to create ETF instruments like M. S T Y and I M. S T.

Unknown Attendee: And that makes it possible to create ETF instruments like MSTY and IMST. And those ETFs, they basically are selling the vol of MSTR. And they have very, very high annualized dividend yields. So for a typical investor that wants to capture 100, 150, 200% dividend yield by selling the vol, they don't want to, it's difficult to trade in the options market. And so maybe they just buy MSTY or IMST. That makes it easier for investors to monetize that volatility. How popular is this? Well, MSTY today looked like it had $3.1 or $3.2 billion of AUM in it.

Speaker Change: And those ETF.

Speaker Change: Etfs, they basically are selling the wall of M. S TR and they have very very high annualized dividend yields so for a typical investor that wants to capture 100, 150, 200% dividend yield by selling them all they don't want to it's difficult to trade in the options market and so maybe they just.

Speaker Change: By MST, why or I M. S. T that makes it easier for investors to monetize that volatility.

Speaker Change: How popular is this while MST why today looked like it had 3.1 or $3 $2 billion of AUM in it and I M. S. T has raised something like $40 million of capital in a few weeks a week or two weeks or something not that long.

Unknown Attendee: And IMST has raised something like $40 million of capital in a few weeks, a week or two weeks or something, not that long. And so these are attracting capital flows. And they're attracting capital that wants to monetize that volatility. And they're part of our emerging ecosystem. And so why MSTR? Because we're the most liquid, we're the most volatile, we're the most durable, and we're the most credible place to get that. So our equity is becoming volatile, liquid, collateral for traders. My next point I'll make is that our convertible bonds, they attract capital from a new class of arbitrageurs and hedge funds that otherwise they wouldn't buy BTC and otherwise they wouldn't buy BTC spot ETFs.

Speaker Change: And so these are attracting capital flows.

Speaker Change: When they enter they are attracting capital that wants to monetize that volatility and they are part of our emerging ecosystem and so why M. STR because we're the most liquid where the most volatile where the most durable and where the most crowd.

Speaker Change: Bowl place to get that so our equity is becoming volatile liquid collateral for traders and that creates a demand for the equity that drives up the price of the equity as these as these instruments are delta hedged.

Speaker Change: Or as people buy the underlying equity so they can sell a couple of calls.

Speaker Change: My next point I'll make is that our convertible bonds. They attract capital from a new class of Arbitragers and hedge funds that otherwise they wouldn't buy BTC and otherwise they wouldn't buy BTC spot Etfs.

Unknown Attendee: So if you're unique, you've got a differentiator and we're an operating company, we can issue convertible bonds, a spot ETF cannot, and there isn't any comparable type instrument on top of a BTC commodity. That takes me to my next point, which is BMAX, which is another ETF that was launched. It provides investors with a very convenient way to access MSTR converts. So most investors, if you're not QIB or 144A certified or compliant, you can't just buy the convertible bonds, they're over the counter traded. But but you could buy BMAX and BMAX buys, it's like 80 percent or something exposed to MSTR convertible bonds.

Speaker Change: So if your unique you have got a differentiator and we're an operating company. We can issue convertible bonds are spot ETF cannot and there isn't any comparable type instrument on top of a BTC commodity.

Speaker Change:

Speaker Change: That takes me to my next point, which is B, Max which is another ETF that was launched.

Speaker Change: It provides investors with a very convenient way to access MST our converts.

Speaker Change: Most investors if youre not <unk> or $1 44, a certified or are compliant you can't just buy the convertible bonds that are over the counter traded but but you could buy be Max and be Max buys, it's like 80% or something exposed to MST our convertible bonds.

Unknown Attendee: So that's a unique characteristic of MSTR. Again, The uniqueness, the opportunity as a differentiator. MSTR, the security is included in QQQ, MSCI and crypto indices. And as we get built into all these ETFs, that drives passive capital flow. And so, you know, on a day when the NASDAQ 100 is surging up 2%, there's a lot of capital that's going to go into the risk on trade, it's going to go into QQQ, that will find its way to us. That is an advantage over underlying BTC, the BTC ETFs and BTC itself, they're not in the NASDAQ index.

Speaker Change: So that's a unique characteristic of M. S T R.

Speaker Change: Again.

Speaker Change: The uniqueness of the opportunity as a differentiator.

Speaker Change: MST or the security is included in Q, <unk>, MSCI and crypto indices and as we get built into all of these etfs that drives passive capital flow and so on.

Speaker Change: On a day when the NASDAQ100 is surging up 2% Theres a lot of capital.

Speaker Change: Thats going to go into the risk on trade, it's going to go into Q2 that will find its way to us.

Speaker Change: That is an advantage over underlying BTC, the BTC Etfs and BTC itself, they're not in the NASDAQ index and so if you're wondering.

Unknown Attendee: And so if you're wondering, Why would there be more demand for our stock? Because we're a security and because we do get indexed like this. The next point I'm making is that the MSTR brand is recognized worldwide. And so our brand recognition and our scale, they drive superior investor interest. It's very common. It's very interesting. To note, if you combine this with the next point, many investors, they're obligated to invest in securities or they're biased toward investing in securities because the history of commodities is not good, right? The only commodity that you could ever invest in over the long term is gold and gold is considered to be kind of a slow debt asset.

Speaker Change: Why would there be more demand for our stock because were a security and because we do get index like this.

Speaker Change: The next point I'm, making.

Speaker Change: Is that the <unk> brand is recognized worldwide and so our brand recognition and our scale they drive superior investor interest.

Speaker Change: It is very common and it's very interesting.

Speaker Change: To note if you combine this with the next point many investors they're obligated.

Speaker Change: To invest in securities are their bias toward investing in securities because the history of commodities is not good right. The only commodity that you could ever invest in over the long term as gold and gold is considered to be kind.

Speaker Change: A slow that asset so most investors the great majority of their money is made in investing in securities.

Unknown Attendee: So most investors, the great majority of their money is made investing in securities. So when I'm speaking at investor conferences and I'm telling everybody how great Bitcoin is and I'm giving them a hundred reasons why Bitcoin is great, it's not uncommon that they say, well, I decided to buy your stock. I don't have to ask them. They're like, well, I get it. The Bitcoin is great, but my prime broker doesn't handle Bitcoin and I just want to buy the security. It's quick, easy. It's marginable. I can buy it. 15 seconds. And people can't, you know, it's like, why did Domino's pizza get successful?

Speaker Change: So when I'm speaking at Investor conferences, and I'm, telling everybody how great bitcoin is and I'm, giving them 100 reasons why bitcoin is great. It's not uncommon that they say well I decided to buy your stock I don't have to ask them. They are like well I get it the bitcoin is great, but my prime broker doesn't handle bitcoin and I just.

Speaker Change: Wanted by the security is quick easy it's marginal ball I can buy it in <unk>.

Speaker Change: <unk> 15 seconds and people Karen just like why did Domino's pizza get successful Domino's Pizza was successful because people like pizza and because anywhere in the country you could pick up the phone call. The opera and say give me Domino's and say hey, send pizza and you know that there's a domino's pizza somewhere close to you and it's like.

Unknown Attendee: Domino's pizza was successful, because people like pizza. And because anywhere in the country, you could pick up the phone, call the operator and say, give me Domino's and say, hey, send a pizza. And you know that there's a Domino's pizza somewhere close to you. And it's like, I, the brand is weaker for the next 100 pizza companies, maybe their pizza is better, but I just don't know who's in the place I'm traveling to. So it's just like, why do people buy Diet Coke? I go to a restaurant and I ask for some other kind of Coke, they don't have it.

Speaker Change: The brand is weaker for the next 100 pizza companies, maybe their pizza is better but I just don't know who's in the place I'm traveling to.

Speaker Change: So it's just like why do people buy diet Coke I go to a restaurant and I asked for some other kind of coke. They don't have it and then I asked for diet, whatever they don't have it and I get frustrated and after I get beat down because they don't have it I think I'm just going to ask for diet Coke because I know, there's a 95% chance they're going to have it.

Unknown Attendee: And then I ask for Diet whatever, they don't have it. And I get frustrated. And after I get beat down, cause they don't have it, I think, I'm just going to ask for Diet Coke. Cause I know there's a 95% chance they're going to have it. So you're an investor, you have a lot of money, you don't have a lot of attention span, you know, what is this Bitcoin thing? What's the stock I can buy? My, you know, MicroStrategy or strategy, I see that on the screen, the brand does matter, it makes things easier. You know, it's, if I'm going to buy the third best or the fourth best or the fifth best, I got to research it.

Speaker Change: So you're an investor you have a lot of money you don't have a lot of attention span is this bitcoin thing what's the stock I can buy.

Speaker Change: Micro strategy a strategy I see that on the screen the brand does matter it makes things easier.

Speaker Change: If I'm going to buy the third best are the fourth vessel the fifth best I Gotta research. It I don't know alternative it before there's a lot of impedance.

Unknown Attendee: I don't, you know, no one's heard of it before. There's a lot of impedance. And so with that, you see, the next point I'll make is that MSTR represents the strongest BTC exposure in the strongest capital market. A lot of people want to buy a stock in the United States on the NASDAQ or the New York Stock Exchange. They trust it. And if you are looking for BTC exposure, give me the biggest and give me the safest place. Very simple. The last three points I make on this NAB thing is that strike is a unique security.

Speaker Change: And so with that you see the next point I'll make is that M. S. T. R represents the strongest BTC exposure and the strongest capital market a lot of people want to buy our stock in the United States on the NASDAQ or the New York stock exchange, they trusted and if youre looking for BTC exposure.

Speaker Change: I mean, the biggest and give me the safest place it's very simple.

Speaker Change: The last three points I'll make on this <unk> thing is that strike is a unique security. It's a lot more leverage on equity, it's a lot more levers in our convertible bond.

Unknown Attendee: It's a lot more leverage than equity. It's a lot more leverage than a convertible bond. Again, as I pointed out, it's quite possible we'll sell, you know, we could sell a lot of strike, billions and billions of dollars of it that's backed by a lot of equity. And the equity never, the conversion rate never takes place because people don't choose to convert to common equity. And so you're creating a lot of leverage when you finance with strike. And you're acquiring a new class of investors that maybe would be afraid to invest in common equity because it's too much of a roller coaster.

Speaker Change: And as I pointed out it's quite possible. We'll sell you know we could sell a lot of strike billions and billions of dollars of it that's backed by a lot of equity in the equity never the conversion right never takes place because people don't choose to convert it to common equity and so you're creating a lot of leverage when you finance with strike.

Speaker Change: And in Europe.

Speaker Change: Youre acquiring a new class of investors that maybe would be afraid to invest in common equity because it's too much of a rollercoaster.

Unknown Attendee: By the way, there are a lot of people who might like Bitcoin and they're afraid to invest in a spot ETF because what they want is kind of like Bitcoin with guardrails. and or Bitcoin with a downside insurance policy and, and strike looks more like something with guardrails, you know, then then just buying the straight spot ETF that gives you pure BitcoinBall Strife Another example of a unique fixed income security, it attracts new types of capital. It's a perpetual dividend. There's no one offering a 10% dividend at par forever. It's very uncommon to see that I've never seen that in any other security.

Speaker Change: By the way there are a lot of people in mind like bitcoin and they are afraid to invest in our spot ETF because what they want is kind of like bitcoin with guardrails.

Speaker Change: And or a bitcoin with downside insurance policy and strike looks more like something with guardrails, you now than than just buying the straight spot ETF that gives your pure.

Speaker Change: Cornwall.

Speaker Change: Strife.

Speaker Change: Another example of a unique fixed income security it attracts new types of capital. It's a perpetual dividend there's no one offering a 10% dividend at par forever is very uncommon to see that I've never seen that in any other.

Unknown Attendee: And, and it's also, you know, as as Andrew pointed out, these things are high performing, but they're very liquid. And the fact that they're high performing and liquid is a is an appeal to an investor. And they draw new capital. And as capital flows into strike and strive, that's extremely accretive and leveraging for the performance of the equity. If you study banks, you know, you'll notice the number one strategy of most banks in order to create leverage for the common stock is they issue preferred stock. It's a safe way to do it. It's mezzanine capital, mezzanine equity, if you will.

Speaker Change: Security.

Speaker Change: And it's also you know as as Andrew pointed out these things are high performing but theyre very liquid and the fact that they're high performing and liquid is a is an appeal to an investor.

Speaker Change: And they draw new capital and as capital flows into strike and strive that's extremely accretive and leveraging for the performance of the equity.

Speaker Change: Have you studied banks you know youll notice the number one strategy amongst banks in order to create leverage for the common stock is they issue preferred stock, it's a safe way to do it its mezzanine capital mezzanine equity if you will and so.

Unknown Attendee: And so, you know, you could say we're doing something innovative, but we're also lifting a page from the book of conventional banking by putting in place this mezzanine capital structure. And if you would ask any bank, why do you do it? The answer is it's good for our common stock. It increases the yield, the dividend on the common stock without creating risk on the balance sheet. The last point I make here is that We have the potential to generate BTC yield in perpetuity via fixed income securities. You know, the MNAB could go to zero, we can still generate yield by selling strike, selling strife, selling other corporate bonds, selling any fixed income instrument.

Speaker Change: You could say, we're doing something innovative but we're also lifting a page from the bulk of our conventional banking by putting in place. This mezzanine capital structure and if you would ask any bank why do you do it. The answer is it's good for our common stock it increases the yield the dividend on the common stock without <unk>.

Speaker Change: <unk> risk on the balance sheet.

Speaker Change: The last point I'll make here is that.

Speaker Change: We have the potential.

Speaker Change: To generate BTC yield in perpetuity via fixed income securities.

Speaker Change: The <unk> could go to zero, we can still generate yield by selling strike selling strife selling other corporate bonds selling any fixed income instrument.

Speaker Change: <unk>.

Unknown Attendee: And we also can scale up the sales of those things. In essence, if we're selling, you know, if we're selling something 10x over collateralized by BTC, we can we can basically sell preferred instruments are equal to 10% of the capital structure. And if Bitcoin goes up, we just keep scaling up the preferred instrument in the same way. So so this is this is an opportunity that it isn't like it's one and done. It's like we could reasonably be doing this forever, because there's always going to be a demand for USD yield. And if you believe that BTC is going to have the performance of the S&P index or more, then you will always be able to swap BTC yield for USD yield and capture a spread.

And we also can scale up the sales of those things.

Speaker Change: In essence, if we're selling we're selling something tenex over collateralized by BTC.

Speaker Change: Can we could basically sell preferred instruments or equal to 10% of the capital structure and Bitcoin goes up we just keep scaling up the preferred instrument in the same way. So so this is this is an opportunity that it isn't like it's one and done is like we could reasonably be doing this forever.

Speaker Change: Because there's always going to be a demand for U S D yield.

Speaker Change: And if you believe that BTC is going to have the performance of the S&P index or more than you will always be able to swap BTC yield for USD yield and capture a spread and if we can do that then we can create.

Unknown Attendee: And and if we can do that, then we can create, we can create performance which is superior to BTC. and we can maintain a multiple of NAV. I tend to think that a very reasonable way to calculate the right BTC premium for the company would be to take the expected BTC yield. and multiplied by a multiple of 10 to 20. So if we can generate 25% BTC yield, then 10 times that would be a 250% premium to NAB. and MNAV of 3.5, if you will. And if we can, if you put a 20 multiple on it, you could get find your way to a 500% premium to NAV.

Speaker Change: We can create performance, which are superior to BTC.

Speaker Change: And we can maintain a multiple of Nab.

Speaker Change: I tend to think.

Speaker Change: That a very reasonable way to calculate the right BTC premium for the company would be to take the expected BTC yield and multiplied by a multiple of 10 to 20.

Speaker Change: So if we can generate 25% BTC yield than 10 times that would be a 250% premium to NAV.

Speaker Change: And then I have a 3.5, if you will.

Speaker Change: And if we can if you put a 20 multiple on it you could find your way to a 500% premium.

Unknown Attendee: And, and so You look at all these things in their entirety, and then you take into account the rate at which we raise capital and the spread at which we raise the capital, then all of those things give you a sense of how we outperform Bitcoin, and how we grow the nav. Let's go to let's go to The next section. You know, one thing Yeah, let's go. Let's go to the next page. What's our strategy to maximize shareholder value? Well, continuously adjust the rate and the mix of our BTC Treasury operations. Based on market conditions, we're going to work the yield curve when the yield curve is steep, we go to the far end of the yield curve and we do fixed income when the yield curve is flat, we work all sides of the yield curve.

Speaker Change: To Nab and and so.

Speaker Change: You look at all of these things in their entirety, and then you take into account the rate at which we raise capital and the spread at which we raise the capital then all of those things give you a sense of how we outperformed bitcoin and how we grow the NAV, let's go to let's go to.

Speaker Change: The next section.

Speaker Change: You know one thing.

Speaker Change: Yeah.

Speaker Change: Yeah, Let's go let's go to the next page sorry.

Speaker Change: Yeah, whats our strategy to maximize shareholder value.

Speaker Change: Well continuously adjust the rate and the mix of our BTC Treasury operations based on market conditions, we're going to work the yield curve when the yield curve is steep we go to the far end of the yield curve and we do fixed income when the yield curve is flat. We work all sides of the yield curve and also there is a function of how much demand is there in the market for every type of six.

Unknown Attendee: And also there's a function of how much demand is there in the market for every type of security we're And then we're balancing near term capture of BTC yield and gain with long term BTC value creation. Yeah, I mean, I can maximize the yield and the gain this year, but I also got to look out over the next decade. And as you can, you could see from my slides, 90% of the gain is going to be over the 10 year period that follows the transaction. So we're always balancing short term versus long term, just like Amazon did that for 20 years.

Speaker Change: We are selling.

Speaker Change: And then we're balancing near term capture of BTC, yielding gain with long term BTC value creation.

Speaker Change: I can maximize the yield and again this year, but I also got to look out over the next decade and as you can you can see from my slides, 90% of the gain is going to be over the 10 year period that follows the transaction. So we're always balancing short term versus long term just like Amazon did that for 20 years the.

Unknown Attendee: The goal you know, is to drive up the stock price to drive MSTR to the max and then and then to grow the company and reach its full potential. So we will support MNAV. right, and are we are seeking to drive it up over time. So when when you look at the MNAB, and you're wondering, what are we thinking? Well, we're thinking we want it to go up, not down, we're we're never acting to hammer it down. When, when the MNAB is expanding, and when there's massive demand in the marketplace, then of course, we're looking to sell and convert that into a BTC gain, a BTC yield and BTC income and BTC value over time.

Speaker Change: Goal.

Speaker Change: You know is to drive up the stock price to drive M. S. T. R to the Max and then and then to grow the company and reach its full potential.

Speaker Change: We will support them Nab.

Speaker Change: And we.

Speaker Change: We are seeking to drive it up over time, so when when you look at the <unk> and you're wondering why do we thinking while we're thinking we want it to go up not down where whenever acting to hammer down when when the <unk> is expanding and when theres massive demand in the marketplace. Then of course, we're looking to sell.

Speaker Change: And convert that into a BTC gain of BTC yield in BTC.

Speaker Change: Income in DTC value over time.

Unknown Attendee: So the best way, of course, for us to generate, to support the MNAV is maximize intelligent leverage with STRIFE and other fixed income instruments. We'll be educating the capital markets to build demand for every type of security we issue. So there's a lot of investor relations and education. We will work to attract capital, new forms of capital, by creating innovative securities for new classes of investors. Strife is a new type of security. Strike is a new type of security. We have other ideas for new types of security. Securities that would attract capital from global markets, attracting capital from Japan or Europe or Canada or other markets and also attract capital from other classes of investors, different types of investors that want a different risk-return ball profile and yield profile.

Speaker Change: So the.

Speaker Change: The best way of course for us to generate data to support the M. NAV is maximize intelligent leverage with strike with strife and other fixed income instruments.

Speaker Change:

Speaker Change: We will be educating the capital markets to build demand for every type of security we issue. So theres a lot of Investor Relations and education.

Speaker Change: We will work to attract capital new forms of capital by creating innovative securities for new classes of investors.

Speaker Change: Strife is is a new type of security strike as a new type of security. We have other ideas for new types of security securities or would attract capital from from global markets are attracting capital from Japan, or Europe, or or Canada, or other other markets and also attract capital.

Speaker Change: From other classes of investors different types of investors don't want a different risk return ball profile and yield profile.

Unknown Attendee: And so we have some flexibility there. we're we're going to create and share BTC credit metrics and models that can assist investors in valuing and assessing the risk of BTC collateralized credit instrument. and we're going to pursue credit ratings for our fixed income securities. So the credit side of this is really important, because as you could see from my torque and my multiple calculations, the thing that will drive our, you know, drive our outperformance that allows us to achieve a 2x BTC return, or get m nabs of 4568. If we want to drive that up, if we want to drive our performance up, if we want two times or three times the volatility of BTC over time, then we need to develop the credit mark.

Speaker Change: So we have some flexibility there.

Speaker Change: Where we're going to create and share BTC credit metrics and models that can assist investors in valuing in assessing the risk of BTC collateralized credit instruments.

Speaker Change: And we're going to pursue credit ratings for our fixed income securities. So the credit side of this is really important because as you can see from my torque and my multiple calculations. The thing that will drive our drive our outperformance that allows us to achieve a two ex BTC return.

Speaker Change: Or get M labs of 4568, if we want to drive that up if we want to drive our performance up if we want two times or three times the volatility BTC.

Speaker Change: Over time, then we need to develop the credit markets.

Unknown Attendee: And I've thrown a lot of metrics at you, and I've talked about a lot of things, and we have a lot of securities, but lest there be any confusion, MSTR. The Common Equity that is that's the principal metric for shareholder value creation and company performance. So if you're asking what is winning, winning is maximizing the price of MSTR, right? I mean, if I have a choice of driving the price up by a factor of 10, and having MNAV be three, or having the price go up by a factor of two and have MNAV be six.

Speaker Change: And I'm throwing a lot of metrics out you and I've talked about a lot of things when we have a lot of securities, but less there'd be any confusion M. S. T R.

Speaker Change: The common equity that is that's the principal metric for shareholder value creation and company performance. So if you're asking what is winning weighing is maximizing the price of MST are right. I mean, if I have a choice of driving the price up by a factor of 10 in having <unk> be three or having the <unk>.

Speaker Change: This go up by a factor of two and have M. B six.

Unknown Attendee: I think that you would want me to drive the price up by a factor of 10, not a factor of two. So we're always thinking about, you know, what is going to maximize MSTR shareholder value creation. And we're balancing every other metric against Now, I've talked about BTC credit, and that's important to our strategy. So why don't we go into a bit more detail on that, because I think that's also very important. I'm going to share with you our BTC credit model and our credit analysis. So let's just start with a few important metrics. The BTC rating, that would be the amount of collateral we have versus in BTC divided by the liability.

Speaker Change: I think that you would want me to drive the price up by a factor of 10, not a factor of two so we're always thinking about.

Speaker Change: What is going to maximize.

Speaker Change: S T R a shareholder value creation, and we're balancing every other metric against it.

Speaker Change: Now I've talked about BTC credit and that's important to our strategy. So why don't we go into a bit more detail on that because I think that's also very important.

Speaker Change: I'm going to share with you our BTC credit model and our credit analysis.

Speaker Change: So, let's just start with a few important metrics.

Speaker Change: The BTC rating that would be the amount of collateral we have versus in BTC divided by the liability. So we have $10 of bitcoin against a one dollar liability that would be a BTC rating of 10.

Unknown Attendee: So we have $10 of Bitcoin against a $1 liability, that would be a BTC rating of 10. And BTC risk is the probability of that liability, that debt instrument being under collateralized by BTC at the end of its term. You know, I've got $10 a collateral, I got $1 bond or $1 of debt, and it's five years. In five years, am I still going to have the $1 to cover the liability? That's the risk. BTC credit, that's the credit spread necessary to offset the risk for a given security. How much more credit spread, how much more yield do I need to be paid every year in order to offset that BTC risk that I'm thinking exists?

Speaker Change: And BTC risk as the probability of that liability that debt instrument being under collateralized by BTC at the end of its term.

Speaker Change: And I've got $10 of collateral I got one dollar bond are $1 of debt and its five years and five years am I still going to have the $1 to cover the liability that's the risk BT.

Speaker Change: BTC credit.

Speaker Change: The credit spread necessary to offset the risk for a given security how much more credit spread how much more yield do I need to be paid every year in order to offset that BTC risk that I'm thinking exist and the BTC credit hurdle.

Unknown Attendee: And the BTC credit hurdle, that is the BTC ARR necessary to create an investment grade instrument. And how bullish would you have to be on Bitcoin for you to look at this credit instrument and say, this should be investment grade. And our proxy for investment grade is 100 basis point credit spread, just so you know. Now it turns out that that credit model is driven by some forecast assumptions. What do you expect the ARR to be? What do you expect the volatility to be over? And so now I'm going to show you how these play out, you know, in our capital Let's go to the next.

Speaker Change: That is the BTC, a or are necessary to create an investment grade instrument. How bullish would you have to be a bitcoin for you to look at this credit instrument and say this should be investment grade and are are proxy for investment grade is a 100 basis point credit spread just so you know.

Speaker Change: Now it turns out that that credit model, it's driven by some forecast assumptions what do you expect the <unk> to be why do you expect the volatility to be overtime and so now I'm going to show you. How these play out you know in our capital structure.

Speaker Change: Let's go to the next slide.

Unknown Attendee: Here's BTC risk. Okay, what you can see is that If I actually asked the question, what is the risk of a 10x over collateralized instrument, I have $10 of Bitcoin for every dollar I owe, if the volatility is 70? Right, you'll see at 16 basis points, there's a point one 6% probability you'll be under collateralized in a one year horizon. And of course, if you've only got $2 of Bitcoin for every dollar of debt, and you've got a 70 vol, there's a 26% BTC risk. So there's a zone high volatility, low BTC rating where you're looking like junk.

Speaker Change: Here's BTC risk.

Speaker Change: Okay. What you can see is that.

Speaker Change: If I actually asked the question what is the risk of a tenex over collateralized instrument I have $10 of bitcoin for every dollar I O. If the volatility is 70.

Speaker Change: Right, you'll see at 16 basis points, Theres, a 0.16% probability youll be under collateralized and a one year horizon.

Speaker Change: Of course.

Speaker Change: If you've only got $2 of bitcoin for every dollar of debt and you've got a 70 ball, there's 26% BTC risk. So theres a zone high volatility low BTC rating, where you're looking like junk.

Unknown Attendee: And there's another zone where you're looking like investment. Now let's take this and apply this to our capital. Can we change the slide? Okay. Sorry, this is a bit more elaborate BTC risk matrix. What this is showing you is how the risk builds up over time. And so if you have a five, a BTC rating of five, and you've got a five year bond, then that's and you've got a 50 vol, that says that you've got a 19% BTC risk, a 19% risk of being under collateralized at the end of the five year. and you can see over 10 years you're looking at a 41% risk.

Speaker Change: And Theres another zone.

Speaker Change: What are you looking like investment grade.

Speaker Change: Now, let's take this and apply this.

Speaker Change: To our capital structure.

Speaker Change: Can we change the slide.

Speaker Change: Okay.

Speaker Change: Uh huh.

Speaker Change: Sorry. This is this is a bit more elaborate BTC risk matrix. What this is showing you is how the risk builds up over time.

Speaker Change: And so if you have a five a BTC rating of five and you've got a five year Bond then that's and you've got a 50 mall that says that you've got a 19% BTC risk a 19% risk of being under collateralized at the end of the five years and you can see over 10 years Youre looking at a 41% risk so risk will.

Unknown Attendee: So risk will increase with higher vol, risk will increase with higher duration, risk will increase with lower BTC rate. Let's go to the next. This is our existing capital structure. So I'm showing you eight fixed income instruments. Let's assume that you're a skeptic. You actually think that Bitcoin is not going up. Bitcoin is gonna trade 0% ARR for the next decade. So you're You know, I'll say skeptic, because I think if you thought Bitcoin was going to zero tomorrow, you're not going to buy any of these instruments. But but hardcore skeptic things, Bitcoin is not going to perform like the S&P index.

Speaker Change: Increase with higher vol risk will increase with higher duration risk will increase with lower BTC rating.

Speaker Change: Go to the next slide.

Speaker Change: Yeah.

Speaker Change: Yes.

Speaker Change: This is our existing capital structure.

Speaker Change: So I'm showing you eight fixed income instruments.

Speaker Change: Let's assume that you are a skeptic you actually think that bitcoin is not going up that coin is going to trade zero percent IRR for the next decade.

Speaker Change: So your.

Speaker Change: You know I'll say skeptic, because I think if you thought there was going to zero tomorrow, youre not going to buy any of these instruments, but but hardcore skeptic things bitcoin is not going to perform like the S&P index.

Unknown Attendee: So if you actually calculate the BTC rating of these instruments, this is not hard. You can see the senior credit instruments is the 28 convert, it's 52 times over collateralized. The next one is 13 times over collateral. So now, what's the most junior fixed income instrument? It would be strike, which is 5.3 times over collateral. So what you can see is now, what is the BTC risk? while the duration of the converts is short. So the duration of the 28 node is 2.4. That means the risk is literally zero percent. and the credit spread the BTC credit you would have to have to offset the risk is rounded down from one basis point it's zero So there is zero likelihood, a very, very small likelihood that we're not going to have.

Speaker Change: So if you actually calculate the BTC rating of these instruments. This is not hard you can see the senior senior credit instruments as the 28 convert its 52 times over collateralized the.

Speaker Change: The next one is 13 times over collateralized.

Speaker Change: So now.

Speaker Change: What's the most junior fixed income instrument it would be strike, which is five three times over collateralized.

Speaker Change: So what you can see is now what is the BTC risk.

Speaker Change: While the duration of the converts is short so the duration of the 28 node is 2.4.

Speaker Change: That means the risk is literally zero percent.

Speaker Change: And the credit spread the BTC credit you would have to have to to offset the risk is rounded down from one basis point at zero. So there is zero likelihood infant very very small likelihood that we're not going to have.

Unknown Attendee: a billion dollars of Bitcoin collateral to pay this note off in 2.4 years. That makes intuitive sense, right? You have to have a 98% drawdown on the Bitcoin. Now the question is, what's the market credit spread? Well, the market thinks that that's a 500 credit spread instrument. So the pricing of that is 500 credit spread, market credit spread, the BTC credit rating is zero. That means the premium is 500 basis If we go to the 29 convert, what you can see is that the BTC credit calculation is 21 basis points. For the skeptic, the market credit spread is 975 basis.

Speaker Change: A $1 billion of bitcoin collateral to pay this note off and 2.4 years that makes intuitive sense right you have to have a 98% drawdown on the bitcoin.

Speaker Change: Now the question is what's the market credit spreads.

Speaker Change: While the market thinks that Thats, a 500 credit spread instruments. So the pricing of that is 500 credit spread.

Speaker Change: Market credit spread the BTC credit rating of zero that means the premium is 500 basis points.

Speaker Change: If we go to the 29 convert what you can see is that the BTC credit calculation is 21 basis points for the skeptic the market credit spread is 975 basis points Matt.

Unknown Attendee: Massive spread premium. If you go to the 2030 You could take the 48 basis point BTC credit, compare it to the market credit spread of 1,075. So all down the line, what you see is for the converts, there are massive spread premiums. The market credit spreads are actually at the level of distressed debt. A junk bond index is like 380, 400 basis points. This is double junk, triple junk. It's like the market thinks that the company is going to fail tomorrow and it trades the credit like that. But in fact, even if you're a skeptic on Bitcoin, the BTC credit rating would be somewhere between 21 and 200 bits.

Speaker Change: Massive spread premium.

Speaker Change: If you go to the 2030.

Speaker Change: You could.

Speaker Change: You could take the 48 basis point BTC credit compare it to the market credit spread of 175, So all down the line. What you see is for the converts there are massive spread premiums the market credit spreads are actually at the level of distressed debt.

Speaker Change: <unk> bond indexes like 300 8400 basis points. This is double junk triple jump, it's like the market thinks that the company is going to fail tomorrow and it trades the credit like that but in fact, even if you're a skeptic on bitcoin.

Speaker Change: The BTC credit rating would be somewhere between 21 and 200 Bips.

Unknown Attendee: Now you can see how you would rate the preferreds, they have a longer duration, 10, 11 years, you would come up with a credit rating of 470 bps if you're a skeptic for strife and 514 for strike if you're a skeptic. There's still a substantial spread premium. Now, if you're, if you're a credit investor, you might very well take the spread premium and think, well, if I can close the spread premium, I multiply that by the effective duration of the instrument. That's how much the instrument could trade up. There's an opportunity there. If these things get rated properly.

Speaker Change: Now you can see how you would rate the preferreds they have a longer duration 10, and 11 years, you would come up with a credit rating of $4 70 bps of eurosceptic for strife in 514 for strike of Eurosceptic Theres still a substantial spread premium.

Speaker Change: Now if you're a if you're a credit investor you might very well take the spread premium and think well if I can close the spread premium I multiply that by the effective duration of the instrument. That's how much Dan Schmitt could trade up there is an opportunity there if these things get rated properly.

Unknown Attendee: Now, let's look at this same capital structure if you're a Bitcoin maxi, a maximalist. When you if you think bitcoins going up 30% a year Look at the BTC risk. It's 0, 0, 0, 0, 0, 1%, 1%, 1%. And then the BTC credit spread or credit rating, it looks like 1 BIP, 2 BIPs, 8 BIPs, 14, 13, 13. So this has a profound impact on your view of the preferred stocks, right? All of a sudden, the preferred stocks are looking like they're trading at a 600% spread premium, because they're not that risky for a Bitcoin believer.

Speaker Change: Now, let's look at the same capital structure. If you are a bitcoin maxi maximalist.

Speaker Change: When you if you think bitcoin is going up 30% a year.

Speaker Change: Look at the BTC risk is 00000, 1%, 1%, 1% and then the BTC credit spread or credit rating. It looks like one bps two bps eight bps 14 13 13.

Speaker Change: This has a profound impact on your view of the preferred stocks right. All the sudden the preferred stocks are looking like they're trading at a 600 person.

Speaker Change: Percent spread premium.

Speaker Change: Because they're not that risky for a bitcoin believer there just trading at a massive credit spread.

Unknown Attendee: They're just trading at a massive credit. you know, maybe even more so for the convertible bonds, right? Now you're saying 1000 basis point spread premiums over what you might expect to be the risk. So this is an interesting opportunity for all sorts of investors, right, for equity investors, for fixed income investors, etc. Let's take this a little bit further. Next slide. This shows you BTC credit values across various classes of investors. So you see, if you're a skeptic, you might think that the right BTC credit rating for the convert coming due 2032 is 238 basis points.

Speaker Change: Yes, maybe even more so for the convertible bonds right now you're seeing thousand basis point spread premiums over what you might expect to be the risk.

Speaker Change: So this is an interesting opportunity for for all sorts of investors right for equity investors for fixed income investors et cetera.

Speaker Change: It takes us a little bit further.

Speaker Change: Next slide.

Speaker Change: This shows you BTC credit values across various classes of investors. So you see if you're a skeptic you might think that that the REIT BTC credit rating for the convert coming due 2032 is 238 basis points.

Unknown Attendee: But if you think the Bitcoin is going to perform like the S&P index, it becomes 100 basis. If you're an investor and you think it's like a big tech stock, it becomes 40 base And if you're a maximalist, it becomes 14. So you can see the credit risk and your view of the credit is very much a function of your view of Bitcoin. And the differences with the preferred stocks are equally strong. I've got the market credit spread and then on the right I've got a fascinating metric. BTC Credit Hurdle. we're going to make this very simple, right, which is How fast or how much does BTC have to go up in value each year over the next decade?

Speaker Change: But if you think the bitcoin is going to perform like the S&P index. It becomes a 100 basis points, if you're an investor or anything that's like a big Tech stock. It becomes 40 basis points out of Euromaximalist. It becomes 14. So you can see the credit risk in your view of the credit is very much a function of your view of bitcoin and.

Speaker Change: And the differences with the preferred stocks are equally strong.

Speaker Change: Got the market credit spread and then on the right I've got a fascinating metric be.

Speaker Change: BTC credit hurdle.

Speaker Change: We're going to make this very simple right, which is <unk>.

Speaker Change: How fast or how much does BTC have to go up in value each year over the next decade.

Unknown Attendee: for this credit instrument to be deemed investment grade. like what's it take for it to have a credit of less than 100 basis points a year to offset the And what you can see is for four of the six converts, Bitcoin could decrease, and it would still be investment grade, by our BTC credit standard. and you can see that the 31 to 32 they would require just BTC to go up 10% a year and they should be investment grade. And you can see that if you believe bitcoins going up about 16% a year, then the preferreds are investment grade.

Speaker Change: For this credit instrument to be deemed investment grade.

Speaker Change: Like what's it take for it to have a credit of less than 100 basis points, a year to offset the risk.

Speaker Change: And what you can see is for the for four of the six converts bitcoin could decrease and it would still be investment grade by our BTC credit standards.

Speaker Change: And you can see that the 31 to 32, they would require just BTC to go up 10% a year and they should be investment grade.

Speaker Change: And you can see that if you believe bitcoin has gone up about 16% a year then the preferreds are investment grade and so it's very very interesting way to see the world. When you acknowledged that BTC is collateral.

Unknown Attendee: And so it's a very, very interesting way to see the world when you acknowledge that BTC is collateral. Let's go to the next. Here's a nice graph. What you can see that as you move from skeptic to trader. All of these, these credit calculations, they fall below the junk grade threshold. Junk is 380 basis points right now, that's the index. And of course, once you get to like investor class, they're all looking investor grade, right. And so this is a view of BTC credit that you can use. Let's go to the next slide. Here we calculated BTC credit across volatility.

Speaker Change: Let's go to the next slide.

Speaker Change: Here are some here's a nice graph once.

Speaker Change: You can see that as you move from skeptic to trader.

Speaker Change: All of these are these credit calculations they fall below the junk grade threshold chunk is 380 basis points right now that's the index and of course once you get to like Investor class. They are all looking investor grade right and so this is a view of a BTC credit.

Speaker Change: That you can use let's go to the next slide.

Speaker Change: Here, we calculate the BTC credit across volatility so bitcoin has traded with a volatility between 40 and 80 over the last five years recently, it's been in the 40 to 60 range.

Unknown Attendee: So Bitcoin is traded with a volatility between 40 and 80 over the last five years. Recently, it's been in the 40 to 60 range. And so the real question is, at what point do these things not become investment grade if I'm a Bitcoin maximalist? right, you could see like around 60% 65 ball and what point do they become junk? Well, they almost don't become junk, right? Next slide. The story is very different for the skeptic. Right, if you're a skeptic, you know, they, they stop being investment grade, you know, when Bitcoin is more than 40 volt, and You can see they all, you know, cross junk around 50.

Speaker Change: And so the real question is at what point do these things not become investment grade if I'm a bitcoin maximalist.

Speaker Change: Right you could see like around 60% 65 ball and what point do they become junk.

Speaker Change: I almost don't become John right.

Speaker Change: Next slide.

Speaker Change: The story is very different for the skeptics.

Speaker Change: Alright, if you're a skeptic you know they they stopped being investment grade you know when bitcoin has more than 40 volt and.

Speaker Change: You can see they are cross junk around 50 so.

Unknown Attendee: So what what you expect for volatility matters and what you expect for BTC AR matter. But we think that, that these credit models are elucidating, especially for Bitcoin, for the crypto community, and for the world's full of fixed income investors that like Bitcoin. And so if you're a Bitcoin maximalist, or you're a Bitcoin enthusiast, but you run a fixed income fund, a preferred stock fund, a convertible bond fund or a hedge fund. This all of a sudden starts to really make a difference to your Shall we go to the next slide? Here's the traditional credit ratings.

Speaker Change: What what you expect for volatility matters, and what you expect for BTC AOR matters.

Speaker Change: But we think that that these credit models are elucidating, especially for a bit for the crypto community and for the World is full of fixed income investors that like bitcoin.

Speaker Change: And so if you're a bitcoin maximal asked are you a bitcoin enthusiasts, but you run a fixed income fund a preferred stock fond of convertible bond fund or a hedge fund.

Speaker Change: This all of a sudden starts to really make a difference to your thinking shall we go to the next slide.

Speaker Change: Here's the traditional credit ratings and we're not credit rated.

Unknown Attendee: And we're not credit rated. So I mentioned, you know, one of our interest is to get credit rating agencies to cover and to start to rate this credit. But you can see, if you thought the BTC credit was 50 to 100 basis points, you could make a reasonable argument that this ought to be an AA-rated instrument, or some of them could be AAA-rated instruments. And of course, what you can see right now is that the market treats them as less than CCC, just distressed debt. And so this is a massive opportunity. Next. There are two ways to see the world.

Speaker Change: As I mentioned.

Speaker Change: One of our one of our interest is to get credit rating agencies to cover and to start to rate. This credit, but you can see if you thought the BTC credit was 50 to 100 basis points. You you could make a reasonable argument that this ought to be in a a rated instrument or some of them could be triple a rated instruments.

Speaker Change: And.

Speaker Change: Of course, what you can see right now is that the market treats them as less than CCC or just distressed debt and so this is a massive opportunity next.

Speaker Change: There are two ways to see the world.

Unknown Attendee: If you think about credit ratings, most credit ratings are created for companies that borrowed money that they don't have. And so a company needs a billion dollars, they don't have the billion, they borrow a billion, and they promise to pay it back by creating a future expectation of cash flows. And they say, we're going to generate $250 million of cash flow each year, EBITDA multiples four. And so the credit rating agency is literally handicapping the future expectation of cash flows. And they're green lighting the lending of money to a borrower that doesn't have the money.

Speaker Change: If you think about credit ratings. Most credit ratings are are created for companies that borrowed money that they don't have and so a company needs a $1 billion. They don't have the $1 billion. They borrow a billion and a promise to pay it back by creating a future expectation of cash.

Speaker Change: And they say, we're going to generate $250 million of cash flow each year EBITDA multiples for and so the credit rating agency is literally handicapping the future expectation of cash flows and their green lighting the lending money to.

Speaker Change: Borrower that doesn't have the money.

Unknown Attendee: There's another way to see the world, which is a company on the Bitcoin standard, we already have the money. We have $50 billion of money we could liquidate tomorrow if we needed to. And we want to borrow $10 billion. So if I have $5 for every dollar I want to borrow, I've already got the money. So so the credit, the credit risk analysis isn't really a question of evaluating whether or not you'll generate that money in the future. It's really just evaluating whether you're going to lose the money you already have. And, and so there's a perverse irony here, which is that all of the credit instruments that MSTR has issued are over collateralized by five to one or more.

Speaker Change: There is another way to see the world, which is a company on the Bitcoin standard we already have the money we have $50 billion of money, we could liquidate tomorrow, if we needed to and we want to borrow 10 billion.

Speaker Change: So if I have $5 for every dollar I want to borrow I've already got the money. So so the credit the credit risk analysis isn't really a question of evaluating whether or not youll generate that money in the future. It's really just evaluating whether youre going to lose the money you already have.

Speaker Change: And and so theres, a perverse irony here, which is that all of the credit instruments that M. S. TR has issued are over collateralized by five to one or more.

Unknown Attendee: There isn't a single investment grade company in the United States that is over collateralized by even three to one. That is to say, our company has better collateral and our collateral position is stronger than any borrower that is rated by any credit agency in the United States. In fact, super investment grade might have two times or two to three times collateral coverage. But there's definitely a disruption coming in this market. you know, there's a there's a reason that that all the borrowers don't have collateral. It's because either their treasury asset is is short dated sovereign debt.

Speaker Change: There isn't a single investment grade company in the United States that is over collateralized by even three to one that is to say our company has better collateral and and our our collateral position is stronger than any borrower that is that is <unk>.

Speaker Change: By any credit agency in the United States in fact Super investment grade might have two times or two to three times collateral coverage, but there's there's definitely a disruption coming in this market.

Speaker Change: And there's a reason that that all the borrowers don't them collateral, it's because either their treasury asset is.

Speaker Change: Is short dated sovereign debt.

Unknown Attendee: And of course, the yield on short dated sovereign debt is much less than the cost of capital to borrow. So it makes no sense to hold that as collateral. right? Or their treasury asset is Bitcoin, in which case it totally makes sense to hold as collateral. But unless you're on the Bitcoin standard, you won't have any collateral and you can't tap the credit markets being over collateralized. So what we're really engaged in here is introducing the idea of BTC as collateral and collateral backed lending. The idea of loaning money to someone that has collateral makes all the sense of the world if you're loaning to an individual or you're loaning to an institution.

Speaker Change: And of course, the yield on short dated sovereign debt is much less than the cost of capital to borrow so it makes no sense to hold that as collateral.

Speaker Change: Or their treasury asset as bitcoin in which case it totally makes sense hold as collateral, but unless you're on the bitcoin standard you won't have any collateral on you can't time, the credit markets being over collateralized. So what were really engaged in here is introducing the idea of BTC as collateral and <unk>.

Speaker Change: <unk> backed lending.

Speaker Change: The idea of loaning money to someone who has collateral it makes all the sense of the world If youre loaning to an individual or youre loaning to an institution, but it and it happens all the time, if you're a J P. Morgan city and someone's got a large stock portfolio you would loan to them based on that collateral.

Unknown Attendee: And it happens all the time. If you're JP Morgan or Citi and someone's got a large stock portfolio, you would loan to them based on that collateral. But it almost never happens with publicly traded companies because publicly traded companies don't hold security portfolios. And they don't hold them because of securities laws that prevent them from capitalizing on security. So we are driving a new way to see the world. What happens if there's a bunch of public companies that have a bunch of collateral that's appreciating faster than the cost of capital and they want to borrow against it?

Speaker Change: But it almost never happens with publicly traded companies because publicly traded companies don't hold security portfolios and they don't hold them because of the because of securities laws that prevent them from capitalizing on securities. So we have we are driving a new way to see the world what happens if there's a bunch of public companies that have.

Speaker Change: A bunch of collateral that's appreciating faster than the cost of capital and they want to borrow against it.

Unknown Attendee: In theory, it all ought to become investment grade if you're properly collateralized at the right ball and the right BTC rating. In practice, none of it is right now. This is a campaign of awareness that we'll be waging over time. Next slide. This is a great chart. You wonder about upside and downside. Well, when you buy our equity, you're getting 40% of the upside, 40% of the downside, 80% of the upside, 80% of the downside. It's just linear risk, upside downside. And we've drawn that line. We've also calculated the delta and the downside of all of our convertible bonds and of strikes.

Speaker Change: In theory, it all ought to become investment grade if youre properly collateralize it at the right ball and the right BTC rating.

Speaker Change: And practice none of it is right now this is a campaign of awareness that will be waging overtime next.

Speaker Change: Next slide.

Speaker Change: Okay.

Yeah.

Speaker Change: This is a great chart, you wonder about upside and downside well when.

Speaker Change: When you buy our equity Youre getting 40% of the upside 40% in the downside, 80% upside 80% downside, it's just linear risk upside downside and we draw on that line.

Speaker Change: <unk> also calculated the delta and the downside of all of our convertible bonds and a strike.

Unknown Attendee: And what you can see right here is a lot of the converts, the 31, 32, 28, and 38, they're high delta instruments. They're giving you 80 to 100% of the upside of the MSTR common, but they're giving you less than that much downside. They're actually, if you look at the 2030 convert for a simple example, you're getting 75% of the upside and 15, 10, 15% of the downside. Right, if you look at the 29 convert, this is a fascinating one. It's about 60 delta, you're getting 60% of the upside and it trades below par, no downside.

And what you can see right here is a lot of the converts. The 31 32, 28, and 30 day Theyre high Delta instruments, Theyre, giving you 80% to 100% of the upside of the MST are common.

Speaker Change: But they're giving you less than that much downside there actually there are if you look at the 2030 convert for a simple example, you're getting 75% of the upside and 15 10, 15% of the downside right. If you look at the 29 convert.

Speaker Change: This is a fascinating one it's about 60 delta youre getting 60% of the upside and it trades below par no downside right unless the company defaults youre going to get paid par. So it's got negative downside, you're getting a guaranteed yield to maturity and youre getting a 60 delta instrument.

Unknown Attendee: Right, unless the company defaults, you're going to get paid par. So it's got negative downside, you're getting a guaranteed yield to maturity, and you're getting a 60 delta instrument. If you look at strike, strike is trading below par. So below the liquidation preference below par, but with something like a 35 delta. So if you're an equity investor, These are all very compelling. You can construct a portfolio that's 100% upside, 50% downside. or 100% upside 60% downside or 100% upside 25% downside. They're very interesting opportunities. Right now, the market is very inefficient. And the pricing of these is very inefficient.

If you look at strike strike is trading below par so below the liquidation preference below par, but with something like a 35 delta.

Speaker Change: So if you're an equity investor.

Speaker Change: These are all very compelling you can construct a portfolio that is 100% upside 50% downside.

Speaker Change: Our 100% upside, 60% downside or a 100% upside 25% downside there are very interesting opportunities.

Speaker Change: Right now the market is very inefficient and the pricing of these is very inefficient.

Unknown Attendee: Because the market doesn't recognize BTC credit. There are a number of reasons why I'll get to in a second. But I invite all of you to think about these instruments because they're opportunities. Next. So key takeaways have fixed in. The credit markets are grounded in traditional finance practices and metrics. They have not yet embraced BTC as collateral. They have not adopted real-time risk management practices for BTC. You can calculate BTC risk, BTC credit every second, you know, as the price of Bitcoin changes, as the BTC rating changes, as the volatility changes. You can update it every day as the duration of the credit instruments shrink.

Speaker Change: Because the market doesn't recognize BTC credit.

Speaker Change: There are a number of reasons why I'll get to in a second but I invite all of you to think about these instruments.

Speaker Change: <unk> because their opportunities next.

Speaker Change: So key takeaways in fixed income.

Speaker Change: The credit markets are grounded in traditional finance practices and metrics that they have not yet embraced BTC as collateral they have not adopted real time risk management practices for BTC.

Speaker Change: You can calculate BTC risk BTC credit every second you know as the price of bitcoin changes as the BTC rating changes as the volatility changes you can update it every day as the duration of their credit instruments shrinks right. So their traditional credit ratings are.

Unknown Attendee: Right, so their traditional credit ratings are issued by an analyst once a year, and they go stale, and they're opaque. And you can now create very transparent crypto credit metrics. The market is not there yet. But this is an opportunity. The reason the credit instruments trade with such wide credit spreads is because the markets are traditional. Most of our MSTR convert investors, they're arbitrageurs, they're not Bitcoin investors, they're not equity investors, they're not bond investors. Basically, they're buying $100 million of the bond, shorting $80 million of the stock. And so they're not bringing $100 million of capital to the bond, they're bringing much less capital.

Speaker Change: Our issued by an analyst once a year and they go stale and their opaque and you can now create very transparent.

Speaker Change: Our credit metrics are the market's not there yet but this is an opportunity. The reason the credit instruments trade with such wide credit spreads is because the markets are traditional.

Speaker Change: Most most of our M. S. T R convert investors, they're arbitragers, they're not bitcoin investors, they're not equity investors, they're not bond investors basically they're buying $100 million of the bonds shorting $80 million of the stock and so theyre not bringing a $100 million of capital to the bond there.

Speaker Change: Bringing much less capital that's one of the reasons I believe that the bonds are valued the way. They are valued if if we have long bitcoin investors long M. S. T. Our investors or long fixed income investors are credit investors start to enter this space then I think we're going to see those credits.

Unknown Attendee: That's one of the reasons I believe that the long MSTR investors or long fixed income investors or credit investors start to enter this space, then I think we're going to see those credit spreads and those spread premiums compressed. The OTC market is is one of the culprits. It's very inefficient. It's constrained. There are 144 a regulations, you and you have to be a qualified institutional buyer. And that means most retail and a lot of investors, they just they can't buy these or it's a pain to buy them. And so that impairs the bond value that impairs the liquidity as well.

Speaker Change: Fred's and those spread premiums compress.

Speaker Change: The OTC market as it is one of the culprits, it's very inefficient.

Speaker Change: Constrained there of $1 44, a regulations you are and you have to be a qualified institutional buyer and that means most retail and a lot of investors. They just they can't buy these are it's a pain to buy them and so that impairs the bond value that impairs, the liquidity as well and that creates.

Unknown Attendee: And that creates much wider credit spread. Now, I've laid out these BTC models. And so I believe that there are strong reasons to treat MSTR fixed income securities as investment grade, even though the market assigns credit spreads comparable to distressed debt. I think if you think about it, if people agree with me, if they agree with us, and they and they like Bitcoin, they'll start to view the they'll start to view Bitcoin. not as a speculative asset, but as a safe haven asset. And they'll start to view these instruments not as distressed debt, but as investment grade debt.

Speaker Change: Much wider credit spreads.

Speaker Change: Now I've laid out these BTC models and so I believe that there are strong reasons to treat M. S. T. R. A fixed income securities as investment grade, even though the market assigns credit spreads comparable to distress debt I think if you think about it if people agree with me if they agree.

Speaker Change: Lee with us and they and they like bitcoin they'll start to view that they'll start to view bitcoin.

Speaker Change: Not as speculative asset, but as a safe haven asset and they'll start to view these instruments not as distressed debt, but as investment grade debt.

Unknown Attendee: And so as the perceptions of BTC evolve from speculative asset to safe haven, which is massive discussion in the community all the time, it's reasonable to expect major credit rating agencies to begin rating the MSTR credit instruments, just like we expect banks to embrace Bitcoin, just like we expect insurance companies to embrace, just like the U.S. government, the state, the local, the city governments are embracing Bitcoin. The credit rating industry is going to embrace Bitcoin. And it's just a question of when, which we can't be sure of. MSTR has the potential to issue investment grade fixed income securities.

Speaker Change: And so as the perceptions of BTC evolve from speculative asset to safe Haven, which is massive discussion in a community. All the time, it's reasonable to expect major credit rating agencies to begin rating the M. S TR credit instruments.

Speaker Change: Just like we expect banks to embrace Beck coin just like we expect insurance companies to embrace just like the U S government the state the local the city governments are embracing bitcoin.

Speaker Change: Rating industry is going to embrace bitcoin and it's just a question of when which we can't be sure of.

Speaker Change: M. S. T. R has the potential to issue investment grade fixed income securities.

Unknown Attendee: and we could emerge as the world's first investment grade Bitcoin treasury company. I think this is a great opportunity for us. I don't think it's appreciated. But what happens if we get an investment grade? What happens if we're able to get our our credit instrument? rated, there will be new pools of capital will be incorporated in new indexes, new classes of investors will be able to buy these things, that capital will flow into our securities, then into Bitcoin, it will be beneficial to BTC, to MSTR, to all of our fixed income and credit securities. And it'll be beneficial to all the investors.

Speaker Change: And we could emerge as the world's first investment grade Bitcoin Treasury company.

Speaker Change: I think this is a great opportunity for us I don't think it's appreciated but what happens if we get an investment grade what happens if we're able to get our our credit instruments.

Speaker Change: Rated there'll be new pools of capital will be incorporated in our new indexes new classes of investors will be able to buy these things and that capital will flow into our securities then into bitcoin it will be beneficial to BTC to M. S. T. R to all of our fixed income and credit secured.

Speaker Change: <unk> and it'll be beneficial.

Speaker Change: To all the investors.

Unknown Attendee: Why? Because if you're an investor that appreciates the value of Bitcoin, then those securities we're selling will offer a superior yield and better performance. I think we showed you our convertible bonds are outperforming the other converts, they're outperforming the junk bonds, they're outperforming investment grade bonds, they're out, our preferreds are outperforming other preferreds. It's it's not complicated if you pay higher yield or give higher performance and if you can and if you can show people that you have comparable credit risk or lower credit risk. then you're going to create demand for capital. Right. So if you believe in Bitcoin, if you're Bitcoin maxi, then those those securities do offer superior yield and superior performance.

Speaker Change: Why.

Speaker Change: Because if you are an investor that appreciates the value of Bitcoin then those securities were selling will offer a superior yield and better performance. I think we showed you our convertible bonds are outperforming the other converts they're outperforming the junk bonds, they're outperforming investment grade bond.

Speaker Change: They are up our preferreds are outperforming other preferreds.

Speaker Change: It's a it's not complicated if you pay higher yield or give higher performance and if you can and if you can show people that you have comparable credit risk or lower credit risk than youre going to create demand for capital right.

Speaker Change: So if you believe in bitcoin bitcoin maxi.

Speaker Change: Then those those securities do offer superior yield and superior performance and and they do offer substantially lower credit risk and your point of view because you believe bitcoin is good collateral and so that's an interest it's a very important message it's important opportunity for us.

Unknown Attendee: And, and they do offer substantially lower credit risk in your point of view, because you believe Bitcoin is good collateral. And so that's an interest. It's a very important message. It's important opportunity for us. So On the next slide. I've taken up a lot of your time today. I appreciate it. I appreciate all of your attention. And I'm pretty much nearing the end here.

Speaker Change: So.

Speaker Change: On the next slide.

Speaker Change: I've taken up a lot of your time today I appreciate it and I appreciate all of your attention.

Speaker Change: And pretty much nearing the end here and I'll I'll end with a call to action for all of you and for every every interested investor or potential investor anyone that's interested in bitcoin or M. S. T R or if you simply you know.

Unknown Attendee: And I'll end with a call to action for all of you and for every, every interested investor, potential investor, anyone that's interested in Bitcoin or MSTR. Or if you simply, you know, are interested investor and, and making the right decision, what would I suggest?

Speaker Change: Our I'm interested investor in.

Speaker Change: And making the right decision.

Speaker Change: What I suggest.

Unknown Attendee: I think our investors should contact Moody's, S&P, and Fitch. If you own our equity, if you own our debt, if you own our preferreds, you should call these credit rating agencies or any other credit rating agency, talk to your representative, and request that they begin to cover and rate these instruments. Everybody will benefit. When I say everybody, I mean the entire 400 million people that like crypto, everyone that owns Bitcoin, everyone that owns MSTR, all 55 million of our beneficiaries, everyone that owns the debt, the credit rating agencies will benefit, right? The fixed income investors will benefit, and the world will benefit, right?

Speaker Change: I think our investors should contact Moody's S&P and Fitch.

Speaker Change: If you own our equity if you own our debt if you own our preferreds you should you should call. These credit rating agencies or any other credit rating agency talk to your representative and request that they begin to cover and rate these instruments.

Speaker Change: Everybody will benefit and when I say, everybody I mean, the entire 400 million people that like crypto everyone that owns bitcoin everyone that owns M. S. T. R. All $55 million of our beneficiaries everyone that owns the debt the credit rating agencies will benefit.

Speaker Change: The fixed income investors will benefit and the world will benefit right that this is just a good thing, but the world is inevitable that the credit rating industry should embrace.

Unknown Attendee: This is just a good thing for the world.

Unknown Attendee: It's inevitable that the credit rating industry should embrace Bitcoin and embrace this kind If you're an equity investor, I would suggest you consider I take a hard look at the MSTR convertible bonds and strike. A lot of it a lot of investors just have dismissed them out of hand because they're like, well, I just don't buy that. Or maybe they couldn't because it's over the counter or maybe it's new or different or they're just busy. But, you know, if you're going to buy equity with 100% of the upside and 100% of the downside, it makes sense that you should consider an instrument that might give you 60% of the upside and 10% or 0% or 5% of the downside, right?

Speaker Change: Bitcoin and embrace this kind of.

Speaker Change: This kind of lending.

Speaker Change: If you're an equity investor.

Speaker Change: I would suggest you consider take a hard look at the MSCI, our convertible bonds and strike a lot of a lot of investors just have dismissed them out of hand, because they're like well I, just don't buy that or maybe they couldn't because it's over the counter or maybe.

Speaker Change: That's new or different or they're just busy.

Speaker Change: But if youre going to buy equity with a 100% of the upside in a 100% of the downside. It makes sense that you should consider an instrument that might give you 60% of the upside and 10% or zero percent or 5% of the downside right. There you know if you deem yourself to be smart and portfolio.

Unknown Attendee: You know, if you deem yourself to be smart in portfolio construction, there's a lot of very interesting portfolios that can be constructed when the market misprices risk and misprices exposure. And I think the equity investors could benefit from this because, in my opinion, the fixed income instruments are undervalued relative to the equity right now. If you're a fixed income investor, you know, your preferred stock or a corporate bond investor or convert investor, I would say you should reconsider the, you know, these instruments. you know, think about them again. Think about them in, you know, along the lines of the BTC credit, the BTC risk we've laid out, build your own models.

Speaker Change: Construction, there's a lot of very interesting portfolios that can be constructed when the market misprices risk and misprices exposure and and I think the equity investors could benefit from this because in my opinion are.

Speaker Change: In the fixed income instruments are undervalued relative to the equity right now.

Speaker Change:

Speaker Change: If you have a fixed income investor you know your preferred stock or a corporate bond investor convert Investor I would say you should reconsider the you know these instruments.

Speaker Change: Think about them again think about them in you know along the lines of the BTC credit the BTC risk we've laid out build your own models. One of our objectives is over time, we will go ahead and publish our BTC model to the World will open source. It will make these things available, but but the math here is not.

Unknown Attendee: One of our objectives is over time, we will go ahead and publish our BTC model to the world. We'll open source it, we'll make these things available. But, but the math here is not complicated. You could pretty much do a similar type of math that I've showed you using chat GPT and deep research mode if you want to. Anybody with a Bloomberg can do it, any qualified quant can do it. I would encourage you to do it and think about how you feel about these things. because in my opinion, the actual credit spreads represent a substantial premium to the BTC credit rating, and I think the BTC credit ratings are a valid way to see the world.

Speaker Change: Complicated you could pretty much do a similar type of math that I've showed you using chat GPT and deep research mode. If you want to anybody with a Bloomberg can do at any any quantified quant can do it I would encourage you to do it and think about how you feel about these things.

Speaker Change: Because in my opinion, the actual credit spreads represent a substantial premium.

Speaker Change: Well to the BTC credit rating and I think the BTC credit ratings are a valid way to see the world.

Unknown Attendee: and to see the rest.

Speaker Change: And you see the risk.

Unknown Attendee: If you're a retail or non QIB investor, well, you're locked out of the convert market because of 144A restrictions, I think you should consider BMAX. BMAX is a very innovative ETF that gives, that's constructed to provide or provide convert exposure to investors that aren't able or unwilling to buy the underlying convert. So look at instruments like that, because I think the convertible bonds, especially the short duration convertible bonds, again, they're treated like distressed debt, but they've got very high delta.

Speaker Change: If you're a retail or non QM be investor, while you're locked out of the convert market because of $1 44, a restrictions I think you should consider be Max be Max's are very innovative ETF.

Speaker Change: That gives that's constructed to provide or provide convert exposure to investors that are unable or unwilling to buy the underlying convert so look at instruments like that.

Speaker Change: Because because I think the convertible bonds, especially the shortened duration convertible bonds. There again, they're treated like distress debt, but they've got very high deltas.

Unknown Attendee: And then my ask of all all investors, every every MSTR watcher, every Bitcoiner is educate your peers on the opportunities presented by Bitcoin. Talk about Bitcoin and then talk to them about BTC equity and BTC credit. They're sophisticated subjects, as you can tell by by this elaborate mini tutorial I've given you. Most people don't understand them. But it's in your interest to educate other investors in the benefit of Bitcoin. It's in your interest to explain the nuances in the MSTR equity opportunity. And if you're holding our convertible bonds, if you're, you know, if you're holding these preferreds, you know, and you talk to someone that actually makes investment in fixed income, if you introduce them this opportunity, it's good for them.

Speaker Change: And then.

Speaker Change: My ask of all all investors every every MST or watcher every bitcoiners educate your peers on the opportunities presented by bitcoin.

Speaker Change: Talk about Bitcoin and then talk to them about BTC equity in BTC credit they're sophisticated subjects as you can tell by by this elaborate mini tutorial I've given you most people don't understand them.

Speaker Change: But it's in your interest to educate other investors and the benefit of bitcoin. It's in your interest to explain the nuances and the M. S. T R equity opportunity and if you're holding our convertible bonds. If you're you know if youre holding these preferreds you know and you talked to someone that actually makes investment.

Speaker Change: In fixed income if you introduce in this opportunity it's good for them. It's good for bitcoin. It's good for the World. It's good for you. It's good for the common stock there there are no losers. So we're basically an education mode here.

Unknown Attendee: It's good for Bitcoin. It's good for the world. It's good for you. It's good for the common stock. There are no losers.

Unknown Attendee: So we're basically in education mode here. These aren't my opinions. I will note that you can form your own opinions, but I think there's plenty of reason to think that they're reasonable opinions.

Speaker Change: Let me. These these are my opinions I will note that you can form your own opinions, but but I think there's plenty of reason to think that they're reasonable opinions shall we go to the last slide.

Unknown Attendee: Shall we go to the last slide? I just want to end with our principles. We presented these October 30th last year, and they're just as valid today. Just remind everybody, our plan is buy and hold BTC indefinitely, prioritize the MSTR common stock. Treat all investors with respect, consistency, and transparency. structure our company to outperform BTC. We're working to create more of all more leverage than BTC. keep acquiring Bitcoin, generate positive BTC yield, do this as rapidly and responsibly as we can subject to market dynamics and they literally change every day, you know that. We will issue innovative securities back by BTC from time to time if we think there's a market need for them.

Speaker Change: I just wanted to end with our principles. We presented these October 30th last year.

Speaker Change: And they're just as valid today, just remind everybody our plan is buying whole BTC indefinitely prior.

Speaker Change: Prioritize the MST our common stock.

Speaker Change: Treat all investors with respect consistency and transparency.

Speaker Change:

Speaker Change: Structure, our company to outperform BTC were working to create more more more leverage then BTC.

Speaker Change: Keep acquiring bitcoin generate positive BTC yield.

Speaker Change: Do this as rapidly and responsibly as we can subject to market dynamics and they literally change every day you know that.

Speaker Change: We will issue innovative securities back.

Speaker Change: Backed by BTC from time to time, if we think there's a market need for them.

Unknown Attendee: We'll think hard about it before we do it. When we do things, we try to make sure that not just to create it, but they're also structurally, you know, responsible and durable and scalable. We're going to protect the balance sheet. We want a pristine balance sheet. And, and finally, we're going to promote global adoption of BTC as a Treasury Reserve asset.

Speaker Change: We'll think hard about it before we do it.

Speaker Change: When we do things, we try to make sure that not just accretive but theyre also structurally you know responsible and a durable and scalable.

Speaker Change: We're going to protect the balance sheet, we want a pristine balance sheet.

Speaker Change: And and finally, we're going to promote global adoption of BTC as a treasury reserve asset.

Unknown Attendee: So with that, I want to thank you for your time. I really do appreciate it. I know this went long, but hopefully we gave you a lot of food for thought.

Speaker Change: So with that I want to thank you for your time I really do appreciate it I know this win.

Speaker Change: Long, but hopefully we gave you a lot of food for thought for many of you I'm looking forward to seeing you in Orlando next week, we're going to we're going to go into deeper.

Unknown Attendee: For many of you, I'm looking forward to seeing you in Orlando next week. We're gonna go into deeper details, and I'm sure there'll be a lot of questions, and we're gonna answer a lot of questions, and we're gonna have a lot of other Bitcoin treasury companies there. And we will continue with our strategy. to educate the market and build a very healthy BTC ecosystem for everyone involved. So thank you for your support and wishing you the best.

Speaker Change: Details and I'm sure there'll be a lot of questions and we're going to answer a lot of questions and we're going to have a lot of other bitcoin treasury companies there.

Speaker Change: And and we will continue.

Speaker Change: With our strategy to educate the market and build a very healthy BTC ecosystem.

Speaker Change: For everyone involved so thank you for your support and wishing you the best.

Shirish Jajodia: Thank you, Michael, for the very insightful session today.

Speaker Change: Thank you Michael for the very insightful.

Shirish Jajodia: I know we went a lot over the original one hour mark, but we'll take three quick questions here. And I'll begin with the first one for Andrew. So now that you have adopted the fair value accounting, how do you feel about the big swings in earnings as a result of the Bitcoin price volatility? Sure. Thanks, Shirish. I guess, first off, the fair value accounting, even with the swings, far more transparent for investors and more accurately reflects the true value of our Bitcoin holdings versus the previous accounting rules. So certainly a win for us and other companies adopting Bitcoin.

Speaker Change: Session today I know we went in.

Speaker Change: No not OLED regional whenever mark.

Speaker Change: When you take three quick questions here and I'll begin with the first one for Andrew.

Speaker Change: So now that you have an update the fair value accounting, how do you feel about the big swings in earnings as a result of the bitcoin price volatility.

Speaker Change: Sure. Thanks Bruce.

Speaker Change: First off.

Speaker Change: The fair value accounting, even with the swings.

Speaker Change: Far more transparent for our investors and more accurate.

Speaker Change: Yes.

Speaker Change: The true value of our frequent holdings versus the previous accounting rules. So certainly a win for us and other companies adopting the corn the old accounting was in many ways a barrier.

Andrew Kang: The old accounting was in many ways a barrier, I feel like, but with that hurdle gone, we should continue to see a steady stream of new corporate adopters of Bitcoin as a treasury asset. So the transparency, I think, is vitally important. So how do we feel about the like the positive swings more than the negative swings. But the reality is that Bitcoin is volatile. So I think, you know, overall, I think we're unfazed by the downswings and believe over time, there will be more upswings. As I noted earlier, my 95k Bitcoin price example would reflect a $6.7 billion gain.

Speaker Change: I feel like that but what that hurdle gone, we should continue to see a steady stream of new corporate adopters.

Speaker Change: Clinton is a treasury assets.

Speaker Change: The transparency I think.

Speaker Change: Important so how do we feel about the swings we of course like the positive swings.

Speaker Change: Negative swing, but the reality is that bitcoin is volatile. So I think overall I think were unfazed by the downstream and believe over time.

Speaker Change: There'll be more upswings.

Speaker Change: I noted earlier in mind 95 point price example, would reflect a $6 $7 billion gain.

Andrew Kang: Right now, Bitcoin is trading closer to 96.5. So today, we're the quarter and that were the price for our if that were the price at the end of the quarter, our unrealized gain would be closer to something like $7.6 billion in gain in a single quarter. So I think in the long term, you know, we all believe Bitcoin price is going to go up. And over that same long term, our reported gains will reflect that same trend in our overall earnings.

Right now the coin is trading closer to 96 five.

Speaker Change: So today, where the end of the quarter and that where the price for.

If that were the price at the end of the quarter, our unrealized gain would be closer to something like seven 6 billion.

Speaker Change: And gain in a single quarter, So I think in the long term.

Speaker Change: We all believe that corn prices are going to go up and over that same long term our reported gains will reflect that same trend.

Speaker Change: Our overall earnings.

Andrew Kang: Great, thanks Andrew.

Speaker Change: Great. Thanks, Andrew.

Michael Saylor: The next one is for Michael.

Speaker Change: Just one for Michael.

Michael Saylor: What are your thoughts on the recent MSTR playbook adoptions from other companies and how does the company plan to sustain its leading role? You know, I think it's a very virtuous cycle, and it's a mutually beneficial competition. The more companies that adopt the Bitcoin standard, the more legitimizing it is. As more companies adopt the Bitcoin standard, they're out there educating equity investors, and that brings more equity capital to market. As they start to issue credit instruments, they will educate fixed income investors and credit investors, that brings new capital to the market. There's only 450 Bitcoin a day.

Speaker Change: What are your thoughts on the recent MSCI playbook adoptions from other companies and how does the company plan to sustain its leading role.

Speaker Change: I think it's a very virtuous cycle and it's a it's a mutually beneficial competition.

The more companies that adopt a bitcoin standard.

Speaker Change: More legitimizing it is as more companies adopt a bitcoin standard they are out there educating equity investors and that brings more equity capital in the market as they as they start to issue credit instruments. They will educate fixed income investors and credit investors that brings new capital to the market.

Speaker Change: There's only 450 bitcoin a day and so as we're all buying that bitcoin the price of bitcoin is stabilized supported and driven up.

Michael Saylor: And so as we're all buying that Bitcoin, the price of Bitcoin is stabilized, supported, and then driven up. You know, 99.9% of the capital in the world is invested in the traditional fiat physical financial economy, just we're just that 1% or 0.1% and if it grows from 0.1% to 1%, then the advantages of accelerating institutional adoption. are profound and they offset any possible competition for capital. I also think each capital market needs its own set of BTC companies. In France, you need a local French company. You need a local company in Brazil. You need a local company in Japan.

Speaker Change: <unk>.

Speaker Change: 99.9% of the capital in the World is invested into traditional Fiat physical financial economy.

Speaker Change: We're just that 1% or 1% and if it grows from 1% to 1% than the advantages of accelerating institutional adoption.

Speaker Change: Are profound and they offset any any possible competition for capital I also thank each.

Speaker Change: Each capital market needs its own.

Speaker Change: Set of BTC companies in France, you need a local French company you need a local company in Brazil, you need a local company in Japan you need.

Michael Saylor: The U.S. market can absorb dozens and dozens of companies because there are so many ways to differentiate and every company is going to have its own approach. And of course, a lot of investors, they say one incident or one data point is just a random point and two is a line maybe, but three is a trend. So when you get to the point when there's three, four, five, six companies, a lot of investors will be more comfortable investing in the space because they're going to want to limit their exposure to anyone to a certain risk responsibility in their portfolio, but they're going to look for the next one, the next one.

Speaker Change: The U S market could can absorb dozens and dozens of companies because there are so many ways to differentiate and every company is going to have its own its own approach and of course, a lot of investors yes.

Speaker Change: They say one you know one incident or one data point is just a random point and two two yeah.

Speaker Change: It is a line may be but three is a trend right and so when you get to the point when there's 3456 companies.

Speaker Change: A lot of a lot of investors would be more comfortable investing in the space because they're going to want to limit their exposure to any one to a certain risk responsibility in their portfolio, but theyre going to look for the next one the next one so I think our I think the more companies that join the better it is for bitcoin the better it is for the companies in this space.

Michael Saylor: So I think the more companies that join, the better it is for Bitcoin, the better it is for the companies in the space, and they're really going to accelerate the transition to the Bitcoin standard such that the companies that don't join will find themselves pressured to join over time.

Speaker Change: And they're really going to accelerate the transition to the bitcoin standard such that the companies that don't join will find themselves pressured to join over time.

Michael Saylor: Great.

Phong Le: And the last one here for Phong, can you please update us on the pace of capital raises under the 40 to 42 plan? And how you're thinking about striking the right balance between equity capital and the fixed income capital going forward? And how do you think about the impact of dilution from another 21 billion equity? Well, I'll start with it. I think that's the, that's the big question that we spent the last two hours addressing. Right. And you know, we have conviction in our capital raises and adding to our capital plan. And we talked about that.

Speaker Change: Great.

Speaker Change: And the last one here for phone.

Speaker Change: Can you please update us on the base of capital raises under the 40 to 42 plan and how youre thinking about striking the right balance between equity capital in the fixed income capital late for what and.

Speaker Change: And how do you think about the impact of dilution from another $21 billion equity.

Speaker Change: Well I'll start with I think thats the.

Speaker Change: That's the big question that we spent the last two hours addressing.

Speaker Change: And.

Speaker Change: Yes, we have conviction in our capital raises and adding to our capital plan and we talked about that.

Phong Le: But you know, you have to start with why did we lay out a BTC financial framework, because the existing fiat financial framework doesn't work for BTC. Alright, so dilution, our BTC KPIs, we look at things on a BTC yield, BTC per share, BTC gain basis. And I think you saw Mike's presentation, every single capital raise we've done via our ATM, if you look at our strategy.com website has been accretive on a BTC yield and a BTC per share and a BTC gain basis. And so if we issue an ATM or equity at greater than one times MNAB, all other things being equal, that's accretive, and it's not dilutive to shareholders.

Speaker Change: You have to start with why did we lay out a BTC financial framework, because the existing Fiat financial framework doesn't work for BTC, alright, so dilution.

Speaker Change: Our BTC Kpis that we look at things on a BTC yield BTC per share BTC gain basis, and I think you saw Mike's presentation.

Speaker Change: Every single capital raise we've done via our ATM. If you look at our strategy Dot Com website has been accretive BTC yield net BTC per share and a BTC game basis.

Speaker Change: And so.

Speaker Change: If we issue.

Speaker Change: ATM or equity at greater than one times in there.

Speaker Change: All other things being equal that's accretive and it is not dilutive to shareholders.

Phong Le: That said, if you look at our fixed income instruments, those are even more accretive. You look at BTC yield, all else being equal, but we need that fixed income market to become more mature and more efficient. As MNAV rises, the yield curve starts to flatten and issuing equity starts to look more and more like issuing fixed income. And fixed income instruments do require more BTC ARR to get positive income. But I think the ask and for all of us who are interested in Bitcoin is we need to develop and make that market for fixed income more efficient.

Speaker Change: That said if you look on a fixed income instrument. So those are even more accretive when you look at PTC yield all else be equal, but we need that fixed income market to become more mature and more efficient.

Speaker Change: And that rise as the yield curve starts to flatten and issuing equity starts to look more and more like issue in fixed income.

Speaker Change: And fixed income instruments do require more BTC.

Speaker Change: To get positive income.

Speaker Change: I think I think the ask and for all of US who are interested in decline as we need to develop and make that market for fixed income more efficient and thats an opportunity for strategy and that's an opportunity for bitcoin is not lost on us that we pushed the ATM more heavily than we've pushed fixed income, but the market for fixed income is actually larger.

Phong Le: And that's an opportunity for strategy and that's an opportunity for Bitcoin. It's not lost on us that we've pushed the ATM more heavily than we've pushed fixed income, but the market for fixed income is actually larger than the market for equity. So it's incumbent upon us, Bitcoin folks, to make the fixed income market become more efficient. We're going to work on that. And if that happens, we're going to continue to issue equity, issue debt, and we're going to do it in a way that's accretive to our shareholders. So I think, you know, the more everyone processes the last couple of hours, they'll start to understand the BTC financial framework and they'll understand how we as a strategy think about what we're doing to raise capital.

Speaker Change: It's been in the market correctly so.

Speaker Change: It's incumbent upon us bitcoin folks to make the fixed income market become more efficient we're going to work on that.

Speaker Change: And as that happens.

Speaker Change: To continue to issue equity issued debt.

Speaker Change: And we're going to do it in a way that's accretive to our shareholders.

Speaker Change: So I think the.

Speaker Change: The more everyone processes than last couple of hours. So we'll start to understand the BTC financial framework and I'll understand how weird strategy think about what we're doing to raise capital.

Speaker Change: Yeah.

Phong Le: Excellent.

Phong Le: I think that brings us to the end of this webinar. So any final remarks from Phong? Yeah, I want to share with Mike and Andrew and Shirish, thanks for everybody for sitting through and understanding more about how we think about Bitcoin and think about strategy over the last two hours and 10 minutes. We appreciate all of your support. For those who will be in Orlando next week, very excited to meet and interact with all of you. Those who won't, we'll talk to you again in 12 weeks or so. Thanks and have a good evening. Goodbye.

Speaker Change: Excellent I think that brings us to the end of the 70 or so.

Speaker Change: Any final remarks.

Speaker Change: Hum.

Speaker Change: Yes, I want to share with Mike and Andrew Sri Thanks for everybody for sitting through in understanding more about how we think about bitcoin and think about strategy over the last two hours and 10 minutes. We appreciate all of your support.

Speaker Change: For those who will be in Orlando next week very excited to meet and interact with all of you that those who won't we'll talk to you again.

Speaker Change: In two weeks or so thanks and have a good evening.

Speaker Change: Goodbye.