I agree with that and I will be out of the trade prior to that. That has always been my plan. I have been trading LEAPS in MSTR since 2020 right after the reaction from the Dutch auction from the share holder was so positive. Instead of having to return 250 million to shareholders and only get to buy 250 million in BTC, they were able to return very little to shareholders and bought almost 500 million in BTC. That's how it all started. It's been beyond my wildest dreams in profits for my options. Cost basis is around $1. MSTR board is way to smart to ever let the NAV get to 8 or 10 or higher as that goes against their business plan. It could go there but just for an acute moment. It will not stay there. If it were to stay there then we would have a big problem as that would mean the business plan is failing. Their business plan is clearly stated and being followed to a T. They let the NAV Premium get to 3 to 4 and then harvest the premium by issuing more debt, and or by selling shares into the market to buy more Bitcoin, then bring it back down to 2 to 3. They want the primum to expand and then harvest that premium and then contract the primum to buy more Bitcoin. They just are not incentivized to let the NAV Premium to expand to 8, 9, 10 or 12x. The damping effect on the share price is much greater at a higher NAV Premium than at a lower one like between 2 and 3. That works for me. I want them to let the price of the shares to go down because I want them to convert more of my share ownership into a Bitcoin position. That is synonymous with the share price going down. Things to remember: They will be added to the S&P 500 soon and there will be billions of dollars in corporate capital that must be allocated to MSTR. That will cause the NAV Premium to expand. As a retail buyer of MSTR, as this expansion starts getting toppy, I sell some of my position and covert it into Bitcoin (Just like MSTR is doing themselves) , I wait and allow for the contraction to occur and then buy more options or shares. There are funds that can only invest in corporate debt. MSTR is a great option as BTC is the underlying asset. These are revolving doors of capital.
Discussion
Like I said….trade as you wish.
I view this as a “one trick” pony.
As the price of Bitcoin increases AND MSTR issues more and more shares, the premium to NAV will asymptotically approach 1. (In very volatile fashion)
Once the cycle turns, the fast money exiting (those who have no long term interest in Bitcoin) will temporarily drive the price BELOW NAV.
Be careful. I’ve spent 35 years watching traders with a “plan” give back all their early profits in a trade by nothing more than the sheer and obvious “financial gravity”.
Add leaps to the mix, and you are playing with fire 🔥
Much love 😘
I have taken life changing profits off the table already and am playing with more than just house money. You could call it house money on steroids.
"As the price of Bitcoin increases AND MSTR issues more and more shares, the premium to NAV will asymptotically approach 1. (In very volatile fashion)"
Exactly. This is the MSTR business plan as transparently talked about and executed for over 4 years now. Expand and contract. I already laid out how I accumulate more BTC with this expansion and contraction.
Sounds very disciplined. Well done 👍