Another good one that will get skimmed over; people will miss all associated leverage that’s discussed/shed light on.

Around the 45 min mark Saylor discusses all the easy to see associated risk. Before that, the discussion around premium equity and issuing premium converts at premium equity, is a key point. The *potential* risk is the 6 year mark. Not sure if that’s an actual number or just an example. But, he walks through it all.

At 1:05:ish he calls MSTR a “levered” Bitcoin play.

And goes over a few examples MSTY and MSTX + options which are additional ways of levering MSTR (a Bitcoin derivative effectively). So these are effectively two and three derivatives of spot. That’s a lot of leverage and a lot of ways to break - see GBTC; the arb and premium discount issues.

Putting it altogether brings some of the points we went back and forth on, to light.

Additionally, it exposes the reasoning why (IMO) MSTR trades at a premium to NAV. The MSTX and degenerate TradFi options/leverage is not all that dissimilar to the GBTC arb trade that eventually broke once the NAV got out of whack and the trade became crowded. When interest waned and big players stepped aside or actually realized the risk, the trap door opens and exponentially declined as a bear unfolded.

It’s totally fine and happens in securities but people don’t always understand the risk and think NgU until they are “blindsided”. 

 GBTC was just fine.  Traders got upside down but the trust was just fine.  Likewise MSTR will be just fine.  They way they are using debt is extremely same, and extremely smart.  I'd do the same if I could get 0% money like they do.  You'd be a fool not to 

 I would encourage you to go back and read the legal docs of Genesis and Grayscale. The BTC held was not perceived to be an issue the borrow/lend relationships that encumbered it was an issue and did cause problems, specifically when the broader market got tight. This is typical during liquidity events, regardless of the asset class. 

 Did not cause any problems for the trust.  Indeed it still exists, now as an ETF.  Everything was just fine.  Those people who tried to arb trade it, locking their funds in it for 6 months, got burned but that's part of the risk of being a trader.   People might get burned going leveraged long on MSTR but Microstrategy will be just fine.