Lots More with Matt Levine on MicroStrategy's Infinite Money Machine

Bullish:

• $MSTR - MicroStrategy's stock trades at a premium to its Bitcoin holdings, making it an attractive long opportunity. The company's high volatility also makes its convertible bonds appealing for convertible arbitrage strategies.

  • “MicroStrategy is a pot of Bitcoins that issues stock, and the stock trades at, call it, 2 times the value of the pot of Bitcoins.”

    Matt·3:05

  • “And call options are more valuable the more volatile the company is, more volatile the stock is. And this is a very you know, has like a % annualized volatility.”

    Matt·7:35

  • “They actually have slides on there that are basically, like, boasting about how volatile the stock is.”

    Tracy·7:51
• $CONVERTS - Convertible bonds, particularly those of volatile companies like MicroStrategy, offer attractive opportunities for convertible arbitrage strategies.

  • “And call options are more valuable the more volatile the company is, more volatile the stock is. And this is a very you know, has like a % annualized volatility.”

    Matt·7:35

Bearish:

• $CRYPTOCONVERTS - The market for crypto-related convertible bonds may be saturated, potentially creating shorting opportunities.

  • “People in the convert market talk about being saturated with with, like, crypto converts.”

    Matt·14:27