Yes, true. Selling #MSTR to pay dividends is only sustainable if MSTR deserves a sustained premium over the price of Strategy’s total #bitcoin holdings (NAV).

Does it? I believe it does - if they can grow bitcoin per share and keep accumulating bitcoin. By how much, and for how long?

The preferred stocks have Strategy’s bitcoin as backing. This is Strategy using/leveraging their #bitcoin treasury to issue credit worthy debt. They aren’t just hodling their bitcoin. The difference between the cost of servicing this debt, and the returns of bitcoin accumulated from issuing this debt is their profit.

This profit can scale - if there is enough demand for the preferred’s.

This profit can last - for as long as the yield demanded for bitcoin backed credit instruments is lower than the growth rate of bitcoin price.

The common stock should therefore price this in as a multiple, and we have long term justification for it to trade at a premium to NAV.

In addition, index inclusion leads to a mNAV insensitive bid. ATM in this kind of rising mNAV environment - increases the floor to which MSTR can fall due to mNAV insensitive sells by index funds - and also increases their capacity to collateralise more issuance of the preferreds.

I don’t see this as a ponzi. It’s a legitimate way to get access to compounding bitcoin. Not priced in fiat, but getting a bitcoin denominated yield on a bitcoin treasury. That’s MSTR. It cannot last forever, and it cannot scale forever, but it could work for several decades, and it could grow to trillions.