Nostr Web Client

So you get 8% paid out annually like a dividend? And what does a perpetual call option translate to not sure I understand this?

Jay Pow Pow 10mo ago

Sorry, it's $1000 not $3000. That's because you can convert each STRK share into 0.1 shares of MSTR common stock whenever you want. Because par value is $100, MSTR common stock would need to get to $1000 for that to become worthwhile.

So imagine a number line from 0->infinity and that's MSTR stock price. There's a dividing line at $1000. Below that, you get $8 annually for every share of STRK you own. Above the $1000 MSTR stock price, it becomes worth converting STRK to MSTR stock

So it's similar to a perpetual bond and a $1000 call option without an expiration date

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Discussion

Jay Pow Pow 10mo ago

Does that make sense?

It's not tax efficient so would only be worth consideration if you're older and value cash flow over appreciation, if you can only buy preferred stock and can't buy common stock MSTR or Bitcoin, or want to get cute in a tax advantaged account and ibit/MSTR aren't unique enough

2Pac 10mo ago

Yea I think I’m following you now. Thanks for the explanation.

343PG 10mo ago

Good explanation. I don’t have a need for it right now but think it’s a really interesting product for producing a guaranteed income - if backing an annuity it would allow for a much higher annual income than you’d get on the market. Within that you have to weigh up the credit risk but it’s insanely covered by the bitcoin they own at present.