00:00 Speaker A
probably the biggest continuous story that we have right now, certainly with Bitcoin, is one Mr. Michael Saylor himself. We got this story right here. As I alluded to in the intro,
00:09 Speaker A
This week, we bought bonds, not Bitcoin. The bit vac is charging. Now I want you to focus in on that language because
00:18 Speaker A
die hard viewers of this show may know that I always talk about the Bitfac. It’s mega made as Michael Saylor from Space Balls,
00:26 Speaker A
right? Sucking up all the Bitcoins like the oxygen and air from Druidia, I believe it’s called Druidia.
00:32 Speaker A
I mean, I’m not going to say that he stole it from me, but I may have called him to find out if he stole it from me. Haven’t gotten a response yet. Call me Michael. But anyways, yeah, he bought bonds, but it’s his own bond. Strategy has completed the repurchase of 1.5 billion of its own 2029 convertible note at an 8% discount to par generating an incremental 0.7% Bitcoin yield and lowering aggregate debt to 6.7 billion. So they had
00:56 Speaker A
8.2 billion in convertible debt total. As he said, he has reduced that now to 6.7 billion. So basically, they took the money that they would have previously used to buy Bitcoin in this week. Remember, he bought about $2 billion worth last week, and they paid off their own debt. Now, why would they do this? So I’ve talked about this quite a lot and we’ve seen this across the board with a number of entities. Strive, who’s another Bitcoin Treasury company that’s basically been copying the strategy playbook, but only focusing on their STRC type product, Seta.
01:15 Speaker A
They paid off all their debt only using Seta now to fund Bitcoin. Marathon, uh Marathon, the miner, I told you about them, how they also closed all their convertible notes. Last year they were trying to be a Bitcoin treasury company like Sailor, but they’re fully pivoting to AI, clearing off the debt and basically reconfiguring their cap table. Iron, another Bitcoin miner turned AI company doing the same. Well, now Michael Saylor, who obviously has led with all these products, is closing down the convertible debt as much as possible. This is interesting because
01:36 Speaker A
as he said to me at Money 2020 Las Vegas right after STRC was launched, he said, listen, I wish STRC had been the first product that I had created to fund Bitcoin purchases. Obviously, they have STRK, STRD, they did the convertible notes, they were able to financially engineer their stock. Well, STRC is the final boss for him right now. So basically he’s taking the money when he can
01:55 Speaker A
to shut down the others and optimize the balance sheet to make room for STRC to be the main focus. So not a surprise that they’re doing this right now. As I said, he got it uh was able to pay it back at a discount, which is obviously very, very good news. So they’re reducing that collateral, that collateral debt, uh convertible debt right now. So interestingly, we have a very good quote here from Phong Lee, who is the president and CEO of Strategy.
02:14 Speaker A
He said, on our first quarter quarter 2026 earnings call, we said we would proactively manage our convertible debt and use the full range of capital management tools available to us including the disciplined sale of Bitcoin.. Ooh.
02:26 Speaker A
These transactions reflect that approach. So he very specifically said that they would use Bitcoin sales to uh disciplined to manage their capital, but they did not do that in this case. They have over $800 million dollars now in cash. They were able to use funds from STRC and from using their stock to actually pay off this convertible debt note.
02:40 Speaker A
But saying very openly that they would be willing to sell Bitcoin in the future. It’s a big signal that follows what Sailor said. This was Sailor’s quote. These transactions demonstrate the optionality we have built into strategy’s capital structure and our dynamic multivariant capital allocation model. Strategy has the flexibility to fund strategic transactions using cash, digital equity, digital credit or digital capital. Well, they use the first three and digital capital means theoretically selling Bitcoin. So just know that him strategically selling Bitcoin even though he will be a net buyer,
03:00 Speaker A
very much still on the table here for a strategy. And as I said, that’s a signal they needed to give the market as STRC is a security and the SEC and the buyers of that security need to know that all tools are on the table to maintain that yield and make sure that retail does not get hurt.
