WEBVTT - Perpetual Motion Machine: Adani, MSTR, OSTK 0:00:03.120 --> 0:00:08.280 Bloomberg Audio Studios, Podcasts, Radio News. 0:00:12.080 --> 0:00:14.800 Hello and welcome to the Money Stuff Podcast. You're a 0:00:14.800 --> 0:00:18.680 weekly podcast where we talk about stuff related to money. 0:00:19.640 --> 0:00:21.960 I'm Matt Levin and I write the Money Stuff column 0:00:22.079 --> 0:00:23.520 he Bloomberg Opinion. 0:00:23.239 --> 0:00:25.800 And I'm Katie Greifeld, a reporter for Bloomberg News and 0:00:25.840 --> 0:00:27.320 an anchor for Bloomberg Television. 0:00:28.480 --> 0:00:30.120 What are we talking about today, Katie? 0:00:30.160 --> 0:00:33.040 We're going to talk about a Donnie Sure, what's going on. 0:00:33.680 --> 0:00:36.639 We're going to talk about micro strategy. There's a lot 0:00:36.640 --> 0:00:38.720 to say there, and we're going to talk about short selling, 0:00:38.760 --> 0:00:41.720 which is one of the favorite topics in the money 0:00:41.720 --> 0:00:42.479 Stuff universe. 0:00:43.520 --> 0:00:45.800 That's good or saying yeah, you don't care about. 0:00:45.560 --> 0:00:57.080 It, I'm going to politely agree. This was interesting. So 0:00:57.520 --> 0:01:00.680 got I'm a Donnie. US prosecutor's a qu a Donnie 0:01:00.720 --> 0:01:03.960 who is one of the world's richest people of promising 0:01:04.000 --> 0:01:06.399 to pay more than two hundred and fifty million dollars 0:01:06.440 --> 0:01:11.399 in bribes to Indian government officials to win solar energy contracts. 0:01:11.400 --> 0:01:14.440 This was very interesting on a number of different levels. 0:01:14.600 --> 0:01:16.560 Yeah, I don't read a lot about brivary I love 0:01:16.600 --> 0:01:19.440 bribary cases. I read about them some it's so interesting. 0:01:19.680 --> 0:01:21.560 One thing that's interesting is like usually when you have 0:01:21.560 --> 0:01:24.480 a bribery case, it's like and then they handed the 0:01:24.520 --> 0:01:26.840 bag of cash to the official right, or like there's 0:01:26.880 --> 0:01:29.560 emails being like the official would really like to buy 0:01:29.560 --> 0:01:32.200 his mansion now here. It's like all of the like 0:01:32.319 --> 0:01:36.480 emails they quote sound legitimate because what it says is like, 0:01:36.880 --> 0:01:39.920 to win these power contracts, they had to pay incentives 0:01:40.319 --> 0:01:43.480 to the state power companies, And so they would say 0:01:43.520 --> 0:01:46.119 things like we need to pay incentives to the state 0:01:46.160 --> 0:01:49.040 power companies. And it's like, well that sounds fine. Paying 0:01:49.040 --> 0:01:53.560 the state power companies rebate for buying power seems fine. 0:01:53.680 --> 0:01:57.680 Now paying the state power company executives two hundred million 0:01:57.760 --> 0:02:01.160 dollars is that? But so the stuff they quote makes 0:02:01.160 --> 0:02:03.360 it clear that it's going to these people personally. You know, 0:02:03.400 --> 0:02:06.680 I read a lot about like how if you were 0:02:06.760 --> 0:02:09.240 to pay bribes. None of this is ever legal advice, 0:02:09.360 --> 0:02:10.680 but I read a lot about how if you were 0:02:10.720 --> 0:02:13.520 to pay bribes, you should try to make them look 0:02:14.040 --> 0:02:17.720 business like and not like a sack of cash and 0:02:17.800 --> 0:02:21.280 like winking emails saying I've given you the chickens, but 0:02:21.480 --> 0:02:24.000 just like, yes, we're paying incentives to make a commercially 0:02:24.080 --> 0:02:25.920 viable contract with the state power company, you know, and 0:02:25.919 --> 0:02:28.120 if it happens to go to the executives personally, then 0:02:28.360 --> 0:02:29.480 like you can prove it. 0:02:29.639 --> 0:02:32.360 Hearing you describe that kind of reminds me of the 0:02:32.480 --> 0:02:35.760 Eric Adams emails with the airline, and one of his 0:02:35.800 --> 0:02:37.520 staffers was like, no, you got to make it look 0:02:37.560 --> 0:02:40.200 a little legit. He put that in an email or 0:02:40.280 --> 0:02:42.280 she I don't know, yeah, put that in an email. 0:02:42.360 --> 0:02:44.720 I only read like the charging documents from the SEC 0:02:44.760 --> 0:02:47.200 and from the Department of Justice, and so one assumes 0:02:47.240 --> 0:02:51.079 they have evidence and testimonies saying oh, yeah, we gave 0:02:51.120 --> 0:02:55.240 them the money personally. But it's actually weird because it's like, 0:02:55.360 --> 0:02:57.880 for one thing, these numbers are so large. If you're 0:02:57.880 --> 0:02:59.960 paying two hundred million dollars, it doesn't sound like you're 0:03:00.080 --> 0:03:02.959 paying two hundred million dollars to the power company. It's 0:03:02.960 --> 0:03:04.000 like that's a big bribe. 0:03:04.240 --> 0:03:06.239 Oh yeah, two hundred and fifty million. 0:03:06.520 --> 0:03:09.160 Yeah. And the bribes are weird because it's like one 0:03:09.200 --> 0:03:11.360 of them is like they did deals with different Indian 0:03:11.400 --> 0:03:13.880 states and so one of them it's like they paid 0:03:13.919 --> 0:03:15.880 several hundred thousand dollars. So yeah, that sounds like a 0:03:15.880 --> 0:03:17.520 bride and when I was like, they paid several hundred 0:03:17.560 --> 0:03:20.360 million dollars, Like that sounds like a legitimate business expense. 0:03:20.560 --> 0:03:21.280 Yeah. 0:03:21.320 --> 0:03:23.120 And like also the guy who got two hundred thousand 0:03:23.160 --> 0:03:25.760 dollars must be annoyed reading this indictment, like I could 0:03:25.760 --> 0:03:28.680 have gotten two hundred million dollars. Strange. 0:03:28.880 --> 0:03:33.640 Something that maybe you can expand upon is how this 0:03:33.840 --> 0:03:38.200 ties into the US, Like US prosecutor, yes, are alleging 0:03:38.240 --> 0:03:40.760 that he bribed the Indian government. Like why is the 0:03:40.880 --> 0:03:41.800 US getting involved? 0:03:41.880 --> 0:03:45.000 Okay, So part of the answer is the US loves 0:03:45.000 --> 0:03:48.000 to get involved. Like there are much crazier cases than this, right, 0:03:48.040 --> 0:03:50.560 I love like Olympic doping cases where it's like, you know, 0:03:50.960 --> 0:03:55.080 in Paris, a foreign athlete gets drugs from a foreign 0:03:55.240 --> 0:03:58.440 doctor and the US is like, ah, that's undermining international 0:03:58.440 --> 0:03:59.520 sport and they'll bring charges. 0:03:59.600 --> 0:04:01.600 Well, you know, you know when an American athlete could 0:04:01.640 --> 0:04:02.320 have won that race. 0:04:02.840 --> 0:04:04.120 That's a good point, thank you. 0:04:04.320 --> 0:04:06.880 I think about this a lot anyways. 0:04:06.560 --> 0:04:10.120 Go on doping your horse. But everything sort of flows 0:04:10.120 --> 0:04:12.160 through New York, you know. Like part of the answer 0:04:12.240 --> 0:04:15.520 is that a Donnie Green, which is the a Donnie 0:04:15.560 --> 0:04:17.720 Group entity that allegedly paid the bribes, like they had 0:04:17.720 --> 0:04:19.840 like a partner on these power deals, and that's a 0:04:19.920 --> 0:04:22.839 company called the Azure Global Power and that was for 0:04:22.880 --> 0:04:26.320 a while listed in New York. But the main answer, 0:04:26.520 --> 0:04:29.839 particularly in like the SEC case, is that a Donnie 0:04:29.880 --> 0:04:34.720 Green issued bonds. They did like an international dollar nominated 0:04:34.880 --> 0:04:37.600 bond offering, and some of those bonds were sold to 0:04:37.680 --> 0:04:42.280 US investors, and so allegedly they defrauded US investors. And 0:04:42.480 --> 0:04:45.320 it's very interesting. Freud I wrote that this is basically 0:04:45.320 --> 0:04:48.359 a green washing case because what happens is they issue 0:04:48.360 --> 0:04:50.560 these bonds in twenty twenty one when they're paying the bribes, 0:04:51.279 --> 0:04:54.480 and they're allegedly paying the bribes, and they paid the 0:04:54.520 --> 0:04:57.480 bonds back in twenty twenty four. So like nobody lost 0:04:57.480 --> 0:05:01.280 any money. The investors are fine, the US investors a fine. 0:05:01.640 --> 0:05:03.880 How are they defrauded? Well, they were defrauded, because the 0:05:03.920 --> 0:05:06.360 SEC makes a big point of saying, look at all, 0:05:06.440 --> 0:05:09.120 like the ESG promises that a Donnie puts in the 0:05:09.120 --> 0:05:13.120 bond offering, like they're like, not only are we a 0:05:13.160 --> 0:05:17.080 renewable power company, but we're also one that works in 0:05:17.120 --> 0:05:20.640 developing countries and doesn't pay bribes and like you can 0:05:20.680 --> 0:05:23.080 imagine being an ESG investor in twenty twenty one and saying, 0:05:23.080 --> 0:05:26.080 I would love to put money into a company that 0:05:26.120 --> 0:05:28.159 does like renewable power which is green and very like 0:05:28.240 --> 0:05:31.719 E and also works in developing countries, so it's like, 0:05:31.839 --> 0:05:34.760 you know, providing clean power to places where it's like 0:05:34.760 --> 0:05:36.560 not as easy to fund solar projects. So it's like 0:05:37.000 --> 0:05:39.839 s And then it doesn't pay bribes because like a 0:05:39.880 --> 0:05:42.839 lot of you know, energy projects in developing countries, you 0:05:42.880 --> 0:05:43.960 worry about it they pay bribes. 0:05:44.000 --> 0:05:44.320 Good G. 0:05:44.640 --> 0:05:47.960 It's some good G. And like the SEC says that 0:05:48.279 --> 0:05:51.760 Donnie Green position itself as a leader in environmentally conscious, 0:05:51.760 --> 0:05:55.680 socially responsible and good corporate governance principles, and it sought 0:05:55.720 --> 0:05:59.040 to differentiate itself from its peers and other potential investments 0:05:59.120 --> 0:06:01.919 or issuers and developing countries that might be susceptible to 0:06:01.960 --> 0:06:05.600 corruption and bribery issues. Oh, if you're an ESG investor, 0:06:05.640 --> 0:06:08.560 like you're looking at solar projects and development countries and like, oh, 0:06:08.600 --> 0:06:11.000 these probably pay bribes and that's not very ESG. But 0:06:11.040 --> 0:06:13.560 then Donnie's like, we do solar projects in India and 0:06:13.600 --> 0:06:15.760 we don't pay bribes, and you're like, great, and those 0:06:15.760 --> 0:06:18.960 people were defrauded because they allegedly invested in a company 0:06:19.080 --> 0:06:19.960 that did pay bribes. 0:06:20.080 --> 0:06:22.120 Yeah. So there you go a detail that I love 0:06:22.160 --> 0:06:25.359 about this whole thing. You talk about a Donnie Green, 0:06:25.760 --> 0:06:29.560 you think about gotam a Donnie himself. The reason why 0:06:29.600 --> 0:06:32.599 he is so rich and like so systemically important to 0:06:33.120 --> 0:06:36.560 the government and their ambitions and also the Indian stock market. 0:06:36.680 --> 0:06:40.040 He made his money in coal mining. Oh sure, and 0:06:40.120 --> 0:06:42.080 like this is all part of his broader reinvention. 0:06:42.720 --> 0:06:45.479 Well yeah, although like that's actually not that uncommon, Like 0:06:45.560 --> 0:06:47.880 a lot of like energy and infrastructure companies are like 0:06:48.040 --> 0:06:50.279 we also do green energy because like if you're in 0:06:50.320 --> 0:06:52.720 the energy business, you have some advantages and like yeah, 0:06:52.839 --> 0:06:55.360 entering energy contracts better solar energy. 0:06:55.480 --> 0:06:55.680 Yeah. 0:06:55.720 --> 0:06:59.359 I just like that he became greener and also allegedly 0:07:00.200 --> 0:07:03.960 that's true pp Yeah yeah, well you say started doing 0:07:04.720 --> 0:07:06.560 We don't know that's true, you know, I. 0:07:06.480 --> 0:07:09.200 Mean obviously, like there's the there's like the Hindenburg allegations 0:07:09.200 --> 0:07:09.720 a while back. 0:07:09.840 --> 0:07:11.520 Yeah, January twenty twenty three. 0:07:11.800 --> 0:07:14.960 Yeah, so I don't think this is like particularly confirmatory 0:07:15.000 --> 0:07:17.520 of those, but it's a sort of general. 0:07:17.280 --> 0:07:19.400 Like I was wondering about that. I was trying to 0:07:20.200 --> 0:07:23.480 rack my brain for that information, and I guess I 0:07:23.480 --> 0:07:24.240 could have looked it up. 0:07:24.280 --> 0:07:27.640 But the Hindenburg stuff is like very miscellaneous. It's not 0:07:27.760 --> 0:07:31.400 like Donnie is bad because of this one bad thing 0:07:31.400 --> 0:07:33.960 they did. It's like, oh, look at this nephew, right, 0:07:34.040 --> 0:07:36.960 So it's a little hard to like, somewhere in the 0:07:37.000 --> 0:07:39.440 Hindenburg report there might be like something about this, but 0:07:39.480 --> 0:07:42.080 it's hard to tell. I was gonna say something else. 0:07:42.160 --> 0:07:46.360 What was it we were talking about before Edinburgh cold bribes? 0:07:50.480 --> 0:07:55.120 We could talk about Donald Trump a little bit, like 0:07:55.160 --> 0:07:58.560 it would be interesting to see what happens here with 0:07:59.080 --> 0:08:01.000 a new US attorney in New York. 0:08:02.080 --> 0:08:03.240 Yes, I want to get to that, but I want 0:08:03.240 --> 0:08:04.520 to go back to the thing I was going to say. 0:08:04.560 --> 0:08:09.480 A Donnie himself is very closely associated with power in 0:08:09.520 --> 0:08:12.040 de He's like most with Mody and like he's a 0:08:12.040 --> 0:08:16.480 political figure as well as a business figure. And it's 0:08:16.520 --> 0:08:18.640 interesting to me if you read this case. The way 0:08:18.720 --> 0:08:22.640 that the deal works is that step one, a Donnie 0:08:22.640 --> 0:08:26.480 Green wins this enormous contract with the Indian federal government 0:08:26.880 --> 0:08:29.840 green power thing, and then step two, to like make 0:08:29.840 --> 0:08:31.440 that contract work, they have to go out and win 0:08:31.480 --> 0:08:35.720 contracts with each Indian states power company, and like allegedly 0:08:36.559 --> 0:08:39.160 they win the power contract, the federal contract first, and 0:08:39.200 --> 0:08:41.440 then they go out and start bribing the state governments. 0:08:42.760 --> 0:08:46.440 There's no suggestion that they won the federal contract illegitimately, 0:08:46.840 --> 0:08:49.120 which is like it's a little interesting. I don't know. Yeah, 0:08:49.160 --> 0:08:52.760 they're like so politically connected in the Indian federal government. 0:08:52.800 --> 0:08:55.199 It's like, it's like interesting that they're like pan bribes 0:08:55.240 --> 0:08:57.440 that say, it's just on the rais an eye brat 0:08:58.120 --> 0:08:58.720 Donald Trump. 0:08:59.000 --> 0:09:02.839 Donald Trump. So Donnie really likes Donald Trump, at least 0:09:02.840 --> 0:09:07.280 according to his social media presence after Trump. I think, yeah, I. 0:09:07.200 --> 0:09:10.160 Think, if you're a business person, this is not true 0:09:10.160 --> 0:09:12.160 in twenty sixteen, but it's true in twenty twenty four. 0:09:12.160 --> 0:09:14.480 If you're a business person, you really like Donald Trump 0:09:14.640 --> 0:09:16.319 according to your social media presence. 0:09:16.440 --> 0:09:19.520 Yeah, that's actually that's very true across nationalities. 0:09:19.800 --> 0:09:22.640 It's just like, why not, Well, on that trem. 0:09:22.360 --> 0:09:25.800 He didn't just congratulate him. He also committed to invest 0:09:25.880 --> 0:09:28.520 ten billion dollars in the US create as many as 0:09:28.600 --> 0:09:30.079 ten thousand jobs. 0:09:30.200 --> 0:09:30.800 Incentives. 0:09:31.080 --> 0:09:34.160 Yeah, incentives sometimes are another word for bribes. 0:09:34.200 --> 0:09:37.880 But yeah, though again it's like if he committed to 0:09:37.960 --> 0:09:41.960 invest ten billion dollars in the United States, that's a 0:09:41.960 --> 0:09:45.400 good incentive. That's like, the United States in this relationship 0:09:45.440 --> 0:09:48.200 is the principal. If he committed to invest ten billion 0:09:48.240 --> 0:09:52.840 dollars in Trump Media, then that would be that that's like, 0:09:53.080 --> 0:09:55.319 that's the agent. But now I don't I don't think 0:09:55.320 --> 0:09:59.360 that's happening. I remember in the first Trump administration being 0:09:59.400 --> 0:10:04.479 interested in what sort of foreign corupt Practices Act prosecutions 0:10:04.640 --> 0:10:08.839 there would be given Trump's whole thing. And I remain 0:10:08.880 --> 0:10:13.360 interested in the second Trump administration about that because in 0:10:13.400 --> 0:10:16.760 the first administration Trump owned a hotel or foreign governments 0:10:16.760 --> 0:10:19.640 would put people up at high rates. But now there's 0:10:19.679 --> 0:10:22.160 like there's Trump Media. There's like a lot going on. 0:10:22.480 --> 0:10:35.640 So we'll see, we'll see. 0:10:38.200 --> 0:10:42.080 Oh my gosh, micros Strategy, Micro's strategy is buying so 0:10:42.240 --> 0:10:45.600 much bitcoin. Micro strategy shares are going up so much. 0:10:46.240 --> 0:10:50.640 Micro Strategy has another short cellar after it. Where do 0:10:50.640 --> 0:10:51.360 you want to start? 0:10:51.840 --> 0:10:55.360 Its strategy is so interesting, but it's so simple, it's 0:10:55.400 --> 0:10:59.000 so simple. We were talking to John Collison. I remember 0:10:59.080 --> 0:11:05.040 on this podcast he argued for the view that companies 0:11:05.240 --> 0:11:09.280 should focus on doing their business well and that a 0:11:09.360 --> 0:11:12.559 company that spends too much time focused on like doing 0:11:12.640 --> 0:11:16.040 stuff with stock or like optimizing its stock. Probably just 0:11:16.880 --> 0:11:20.679 doing stock trades is probably it's probably a bad idea, 0:11:20.679 --> 0:11:23.440 and you should focus on building the great business. Mega 0:11:23.520 --> 0:11:26.520 said he has a business, right runs an enterprise. 0:11:26.200 --> 0:11:29.280 Software nominally a software Yeah. 0:11:29.160 --> 0:11:34.480 Right, totally has a business. But one gets the sense 0:11:35.120 --> 0:11:37.280 that most of what it's executives focused on day to 0:11:37.360 --> 0:11:40.199 day is is sharing lots of stock and using the 0:11:40.240 --> 0:11:41.400 proceeds to buy lots of bitcoin. 0:11:41.480 --> 0:11:42.840 How do we get more bitcoin? 0:11:43.160 --> 0:11:45.000 And then talking up the fact that they've bought more 0:11:45.000 --> 0:11:48.600 bitcoin with the proceeds from selling stock. And I don't 0:11:48.640 --> 0:11:51.120 know how that has affected the customers or their enterprise 0:11:51.160 --> 0:11:54.520 software business. I don't know if like the enterpres yeah, 0:11:54.520 --> 0:11:58.520 I know, right, but as a shareholder value maximization strategy, 0:11:58.600 --> 0:12:01.760 right now, they've made the right choice, like clearly, like 0:12:01.800 --> 0:12:04.440 they have made their stock go up so much by 0:12:04.480 --> 0:12:07.880 doing this insane perpetual motion trade. Where there are stock 0:12:07.920 --> 0:12:10.520 trades that, like I wrote, like one hundred and fifty 0:12:10.520 --> 0:12:12.439 percent premium to the value of the underlying bitcode, it's 0:12:12.440 --> 0:12:14.760 actually more than that because you take into leverage and stuff. 0:12:16.200 --> 0:12:18.480 Let's say there's stock trades like three times the price 0:12:18.520 --> 0:12:22.040 of like their underlying bitcoin, And so they just sell 0:12:22.280 --> 0:12:24.320 a dollar worth of stock, they use it to buy 0:12:24.320 --> 0:12:26.240 a dollar worth of bitcoin, and their stock goes up 0:12:26.240 --> 0:12:29.200 by three dollars. So they just perpetually expanding their market cap. 0:12:29.880 --> 0:12:33.200 And like, when I think about that trade, you know, 0:12:33.200 --> 0:12:35.560 we talked about the Destiny Attack one hundred fund, where 0:12:35.600 --> 0:12:37.880 like it was trading at like a thousand percent premium 0:12:38.000 --> 0:12:41.640 to the underlying private company shares because you could get 0:12:41.640 --> 0:12:43.240 those shoes. And so I was like, why they should 0:12:43.240 --> 0:12:45.640 is your stock because that'll compress the premium, right, Like 0:12:45.720 --> 0:12:48.200 you sell more stock, that puts selling pressure on your stock. 0:12:48.240 --> 0:12:50.760 Your stock goes down. Meanwhile you buy the underlying assets, 0:12:50.840 --> 0:12:53.640 the underlying assets go up. You sort of eventually get 0:12:53.640 --> 0:12:56.040 to a place where you're fairly valued. That's what micro 0:12:56.080 --> 0:12:58.560 shategy is doing. But the premium keeps going up, like 0:12:58.600 --> 0:13:00.640 it doesn't work. Like it worked great for them, but 0:13:00.640 --> 0:13:03.600 it doesn't like actually compress the premium. So eventually they 0:13:03.600 --> 0:13:06.560 will have a market cap greater than like the entire 0:13:06.559 --> 0:13:09.360 world's economy because they found a perpetual motion machine. 0:13:09.520 --> 0:13:13.040 And I look forward to that reality. It is interesting. 0:13:13.080 --> 0:13:16.480 I mean I have my ETF glasses on all the time. 0:13:16.520 --> 0:13:21.280 But there's all of these. But no, there's leveraged micro 0:13:21.320 --> 0:13:25.320 strategy and ETFs that are doing incredible trading volume, which 0:13:25.360 --> 0:13:27.439 is nuts. There's been a couple of days where like 0:13:27.480 --> 0:13:30.400 they've been the most traded stock, which is crazy. And 0:13:30.440 --> 0:13:34.480 there is a theory out there that, you know, some 0:13:34.520 --> 0:13:36.760 of the people I follow on Twitter or x are 0:13:36.920 --> 0:13:41.280 entertaining that whether all the money that's coming into these 0:13:41.280 --> 0:13:45.280 ETFs is like just part of the reason why you 0:13:45.400 --> 0:13:48.600 have that big premium. Like Mike Green overhead Simplify has 0:13:48.640 --> 0:13:51.600 made the case that yes, like some of these ETFs 0:13:51.679 --> 0:13:55.920 have powered micro strategy just just like this insane premium. 0:13:55.960 --> 0:14:00.000 Maybe that's why it's not getting arbitraged away. 0:14:00.160 --> 0:14:01.800 I hope that's not true. It just seems like such 0:14:01.840 --> 0:14:03.559 a tail wagging the dog situation. 0:14:04.720 --> 0:14:07.720 So yeah, yeah, it's just like one of the thought exercises. 0:14:07.840 --> 0:14:11.240 One thing that I've heard argued is that micro strategy 0:14:11.360 --> 0:14:15.240 is a pot of bitcoin. Why would you buy it 0:14:15.520 --> 0:14:18.760 at a three times premium to the underlying bitcoin rather 0:14:18.800 --> 0:14:22.720 than buying bitcoin or a bitcoin ETF or something like that. 0:14:23.840 --> 0:14:26.000 One answer is, like, you want to see where this 0:14:26.040 --> 0:14:27.920 is going, and you think the premium will expand, which. 0:14:27.760 --> 0:14:30.520 Is like you know, like science experiment. 0:14:30.480 --> 0:14:32.760 Like you could have a theory that the premium will expand. 0:14:33.000 --> 0:14:35.000 Like micro Strategy is argued, like we're actually a better 0:14:35.000 --> 0:14:37.280 way to hold bitcoin because we can get leverage. You 0:14:37.320 --> 0:14:39.800 can't get leveraged, like you can leverage your bitcoin, but 0:14:39.840 --> 0:14:41.960 like you're trying get three x the bitcoin, So it's 0:14:41.960 --> 0:14:43.800 like it's it's not it's not really a leverage plan. 0:14:44.280 --> 0:14:47.040 We would have a fundamental view that the premium will expand. 0:14:47.280 --> 0:14:50.120 Another thing is like for some reason, you cannot own 0:14:50.760 --> 0:14:54.200 any other bitcoin instrument, and so you own this thing. 0:14:54.560 --> 0:14:56.000 I don't know, I don't know who that would be. 0:14:56.600 --> 0:15:01.120 I have heard people say iras, you can't buy the 0:15:01.240 --> 0:15:03.440 Queen ETF and your IRA, but you can buy micro 0:15:03.480 --> 0:15:06.440 Strategy in your IR which sounds terrifying. This is perhaps 0:15:06.440 --> 0:15:08.960 a less institutionally held stock than like a lot of 0:15:09.000 --> 0:15:12.720 other stocks, perhaps, but there are some institutional investors in it. 0:15:12.760 --> 0:15:15.120 And you could imagine being an equity fund manager where 0:15:15.120 --> 0:15:17.040 your mandate is like you can't really buy ETFs in 0:15:17.040 --> 0:15:21.560 your equity fund, but like can you buy this corporate stock? 0:15:21.720 --> 0:15:22.600 Yes you can, you. 0:15:22.600 --> 0:15:25.120 Can, and like if you like you're like an equity 0:15:25.120 --> 0:15:26.920 fund manager is like, really, I love bitcoin, this is 0:15:26.920 --> 0:15:30.640 like your best way to get Yeah, the three X celebrity, Yes, maybe, 0:15:30.640 --> 0:15:34.480 but like there's something amazing going on. Oh yeah, and 0:15:34.520 --> 0:15:37.960 they are like capitalizing on it to the health. 0:15:38.040 --> 0:15:40.000 Well to that point, maybe one of the reasons why 0:15:40.080 --> 0:15:43.520 you buy micro Strategy at this premium is because you 0:15:43.600 --> 0:15:46.320 love Michael Sailor, Like he does have a cult following. 0:15:46.760 --> 0:15:49.800 Yes, you know who's not doing that trade Michael Sailor. 0:15:51.560 --> 0:15:54.560 Yeah, that's true. And I know there's this daily Mail 0:15:54.720 --> 0:15:56.960 cover from like March two thousand that's been making the 0:15:57.040 --> 0:16:00.840 rounds on X about him losing like six billion dollars 0:16:00.880 --> 0:16:04.320 in a day on micro Strategy, and it's just amazing 0:16:04.360 --> 0:16:08.120 to think that just the evolution of this company and 0:16:08.240 --> 0:16:11.160 the evolution of Michael Saylor, and he's now obviously a 0:16:11.280 --> 0:16:12.200 very wealthy man. 0:16:12.720 --> 0:16:17.760 To be clear, I really respect. Respect is maybe not 0:16:17.800 --> 0:16:18.240 the right word. 0:16:18.840 --> 0:16:20.560 I really cherish and in mind. 0:16:20.760 --> 0:16:23.760 I cherish and MMA is by the idea of like, 0:16:24.400 --> 0:16:26.840 we run a software company, but that's boring, so we're 0:16:26.880 --> 0:16:28.960 just going to get all in. I'm buying as much 0:16:29.000 --> 0:16:31.160 bitcoin as we can and it does so well. 0:16:31.400 --> 0:16:35.480 Yeah, well, so you said, you know, it's a pot 0:16:35.480 --> 0:16:38.760 of bitcoin. Yeah, and so it owns about thirty billion 0:16:38.800 --> 0:16:41.600 dollars worth of bitcoin and its market cap is one 0:16:41.680 --> 0:16:44.000 hundred and five billion dollars. And I think it's interesting 0:16:44.040 --> 0:16:46.840 to compare that to like a traditional asset manager, like 0:16:46.880 --> 0:16:49.040 a black Rock, who has a market cap of like 0:16:49.040 --> 0:16:52.080 one hundred and fifty three billion dollars with eleven something 0:16:52.160 --> 0:16:53.560 trillion dollars in assets. 0:16:53.960 --> 0:16:56.280 Yeah, but this is not the market cap of the manager. 0:16:56.320 --> 0:16:57.640 This is the market cap of the fund. 0:16:58.080 --> 0:16:58.280 Yeah. 0:16:58.400 --> 0:17:00.120 This is a fund that trades at three x the 0:17:00.160 --> 0:17:01.440 value of its underlying stuff. 0:17:01.520 --> 0:17:01.840 Yeah. 0:17:01.920 --> 0:17:03.560 Yeah, it's not actually a fund. 0:17:03.560 --> 0:17:06.280 Right, It's not actually a fund, it's just it just 0:17:06.400 --> 0:17:09.680 is a fund as a software company. 0:17:09.840 --> 0:17:13.720 It's a fun slash software company that now Citron is 0:17:13.920 --> 0:17:14.600 trying to short. 0:17:14.760 --> 0:17:18.040 Yeah. So this is like a famous widow maker, right, 0:17:18.240 --> 0:17:20.320 because people have noticed this for a long time, Yeah, 0:17:20.440 --> 0:17:22.680 and have tried to short it and then carry out. 0:17:23.200 --> 0:17:26.800 Carry Stale did it just in March, and I was 0:17:26.800 --> 0:17:28.320 seeing a look at it. They did the same thing 0:17:28.840 --> 0:17:32.760 long bitcoin short micro strategy. Their reasoning at the time 0:17:32.960 --> 0:17:35.640 was that they're trading history and basic common sense suggests 0:17:35.640 --> 0:17:40.520 that the current inflam right there, premium will contract much 0:17:40.560 --> 0:17:43.520 as it has on prior occasions, providing a compelling opportunity 0:17:43.560 --> 0:17:47.560 for a pair trade. Since that Bloomberg News article, micro 0:17:47.600 --> 0:17:50.959 strategy is up one hundred and seventy five percent and 0:17:51.040 --> 0:17:52.439 bitcoin is up thirty eight percent. 0:17:53.359 --> 0:17:56.920 I mean they're right, like, yeah, before the end of 0:17:56.960 --> 0:17:58.840 the universe that premium will contract. 0:17:58.840 --> 0:18:00.560 Are the heat death of the year universe? 0:18:00.840 --> 0:18:03.920 But like before carrots Dell gets out of the trade, 0:18:03.920 --> 0:18:07.560 who knows, Yeah, right it is has a famous whoto maker. 0:18:08.080 --> 0:18:10.800 Sidron didn't like put out a report being like we're 0:18:10.840 --> 0:18:13.800 all in on anti micro strategy. They were like, we're 0:18:13.840 --> 0:18:15.760 hedging our long bitcoin with a little bit of short 0:18:15.800 --> 0:18:18.919 micro strategy. But yeah, the same basic trade. Yeah, and 0:18:18.960 --> 0:18:22.320 the stock went down, which I was impressed by, Like 0:18:22.760 --> 0:18:24.760 I write about how I heard this is and nobody 0:18:24.800 --> 0:18:25.440 sells it, so. 0:18:25.480 --> 0:18:28.520 I don't know, amazing. Maybe you didn't tweet about it enough, 0:18:28.560 --> 0:18:31.360 because that's what Ciitron did. It was cool to see that, 0:18:31.680 --> 0:18:33.600 but you I don't know. I want to make the 0:18:33.640 --> 0:18:36.960 common sense argument that oh, maybe it went down on 0:18:37.000 --> 0:18:39.080 this specific one just because it's come up so much, 0:18:39.160 --> 0:18:41.560 But I feel like that's never stopped. 0:18:41.480 --> 0:18:43.719 Yeah, like who knows, right, Like there's a lot going on, 0:18:43.840 --> 0:18:47.800 including you know, micro Strategy is in the middle of 0:18:47.840 --> 0:18:50.520 selling twenty one billion dollars worth of stock. They sold 0:18:50.560 --> 0:18:52.560 like four point six billion dollars of stock last week. 0:18:53.000 --> 0:18:56.000 Sorry not last week. It's yeah, it actually was last week. 0:18:56.080 --> 0:18:58.399 I was this week, but time is a flat circle. 0:18:58.800 --> 0:19:01.919 Well, but the point is, like they disclose like this 0:19:02.040 --> 0:19:04.359 Monday that it's WLD four point six billion dollars or 0:19:04.359 --> 0:19:07.440 stock last week. They're probably doing roughly that clip this week, 0:19:07.480 --> 0:19:09.080 so like, you know, maybe the stock went down because 0:19:09.080 --> 0:19:11.840 they were like sold a bunch of stock. In any case, 0:19:11.840 --> 0:19:14.879 they're selling stock buying bitcoin. Bitcoin is going up to 0:19:14.920 --> 0:19:18.800 one hundred thousand dollars. There is no reason that what 0:19:18.880 --> 0:19:23.960 they're doing should increase the premium. But like taking a 0:19:23.960 --> 0:19:28.120 step back, if you're all in on bitcoin, having enormous 0:19:28.320 --> 0:19:32.040 firepower to buy all out of bitcoin makes bitcoin go 0:19:32.160 --> 0:19:34.360 up and it makes your strategy look better. Right, If 0:19:34.359 --> 0:19:36.680 micro Strategy was buying bitcoin and bitcoin is going down, 0:19:36.760 --> 0:19:38.439 like people would be like, yeah, that's annoying, right, But 0:19:38.440 --> 0:19:40.359 they're buying bitcoin. Bitcoin is going up. People like, oh, 0:19:40.359 --> 0:19:42.520 their geniuses. Look, they keep buying bitcoin. It keeps going up. 0:19:42.520 --> 0:19:45.200 So it's like there is like a virtuous cycle component 0:19:45.240 --> 0:19:48.440 to it, where like they're enormous buying firepower gives them 0:19:48.440 --> 0:19:51.320 some momentum, like both in terms of like the value 0:19:51.320 --> 0:19:53.320 of their assets and also in terms of like how 0:19:53.359 --> 0:19:55.240 they look to the market because they look like they're 0:19:55.320 --> 0:19:56.399