Zinger Key Points
- Michael Saylor dismisses concerns about trading below NAV, highlighting operational flexibility to profit from such scenarios.
- He argues diversification would undermine business model and predicts AI will drive massive capital concentration towards digital assets.
- Get the Strategy to Trade Pre-Fed Setups and Post-Fed Swings—Live With Chris Capre on Wednesday, June 11.
Strategy Inc. MSTR Executive Chairman Michael Saylor dismissed concerns about his company potentially trading below net asset value, saying that the firm’s operational flexibility would allow it to profit from such scenarios unlike closed-end trusts.
What Happened: “If you’re a closed-end trust and you trade below NAV, that’s death. If you’re an operating company and we trade below NAV, we just get to monetize that—that’s good for me,” Saylor said during a Q&A session at the Bitcoin Conference, contrasting Strategy’s structure with Grayscale‘s Bitcoin Trust, which previously traded at significant discounts.
Saylor emphasized that Strategy’s status as an operating company provides crucial advantages over trust structures.
“We can buy stock, sell stock, recapitalize, we can take on debt to fix or to close a gap,” he pointed out, noting that trust companies lack such operational flexibility to manage their capital structure.
The executive outlined how Strategy could respond to irrational market pricing through its diverse financial instruments.
“If someone’s stupid enough to short my stock to a dollar, I would sell a billion dollars of the preferred and I would buy back the common stock,” Saylor stated, describing how the company could recapitalize and drive the common stock price higher.
When asked about diversification versus his all-in Bitcoin strategy, Saylor remained adamant about concentration.
“Bitcoin’s the only digital commodity and if you’re going to be a public company then you need to be capitalized on a commodity,” he said, adding that “there’s one best asset and there is no second best asset.”
Why It Matters: The chairman explained that diversification would undermine Strategy’s entire business model by reducing volatility and destroying the company’s options market value.
Mathematical models consistently indicate “the right answer is 100% Bitcoin,” according to Saylor, as diluting Bitcoin holdings would “destroy your performance.”
Looking toward artificial intelligence’s impact, Saylor predicted massive capital concentration as AI reduces demand for traditional economic inputs.
He forecasts the demand for land to fall by a factor of 10 and the demand for labor to fall by a factor of 100, saying capital will be the most relevant input factor left.
Addressing concerns about concentration risk, Saylor noted that Strategy’s pursuit of 2.5% of Bitcoin’s supply resulted in “$23 billion gain for us” but “$2.2 trillion gain for everybody else.”
This demonstrates Bitcoin’s anti-fragile network effects where aggressive buying empowers all other holders.
Read Next: This ‘100% Hit Rate’ Bitcoin Signal Just Flashed Buy: ‘A Big Deal,’ Analyst Stresses
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