Experts analyze Michael Saylor's masterclass Q3 earnings call. Learn about MicroStrategy's $42B capital plan and the future of Bitcoin as a treasury asset.
Timestamp Overview
[00:00:00 - 00:07:13] A Masterclass Earnings Call
- Jeff Walton kicks off the stream, describing Michael Saylor’s Q3 earnings call as a “masterclass” and the best he’s ever seen, comparing Saylor to Michael Jordan in his prime.
- Ben Werkman notes how “downright giddy” Saylor seemed, a departure from his usual stoic demeanor, which energized the panel.
- The group introduces new members Jesse Kobernick, a corporate lawyer providing a legal perspective, and Mason Foard, a young analyst who created the “irresponsibly long” community.
- Ryan McGinnis gives a shout-out to Mason and another community member for organically creating spaces for MSTR investors to connect and share ideas.
[00:07:13 - 00:15:25] The Bitcoin Treasury Company & A $42B Plan
- The panel discusses MicroStrategy’s new branding as a “Bitcoin Treasury Company” (BTC). Ben Werkman explains this is a much clearer and more applicable name than the previous “Bitcoin Development Company.”
- Dylan LeClair compares Saylor’s presentation to Steve Jobs’ early iPhone reveals, highlighting the powerful idea of bringing Bitcoin into the securities market.
- They analyze the massive $42 billion, three-year capital plan ($21B in equity, $21B in debt). Grain of Salt marvels at the simplicity and audacity of a ~$50B company announcing a plan to raise 80% of its market cap.
- Dylan notes that given the stock’s recent trading volume, deploying this capital might not even take the full three years.
[00:15:25 - 00:23:34] The Constant Bid for Bitcoin
- Ben Werkman breaks down the numbers, calculating that the plan could create a constant bid of nearly $40 million for Bitcoin on every market day in the first year alone.
- He argues this sends a powerful message to other corporations on the sidelines that the “train is leaving the station” and they can’t afford to wait any longer.
- Dylan points out that the ATM (At-the-Market) offerings are essentially riskless, high-return opportunities for the executing firms and that shareholders cheer these capital raises because it increases the Bitcoin per share.
- The group agrees that the presentation was a “smash home run” that should make anyone in finance’s “eyes bug out of your head,” regardless of their feelings on Bitcoin.
[00:23:34 - 00:32:17] Outperforming The World & Monetizing the Balance Sheet
- Jeff Walton highlights the slides showing MicroStrategy’s asset performance has crushed not just Bitcoin but also the MAG-7 stocks and traditional 60/40 portfolios.
- Grain of Salt explains that Saylor has shifted the corporate narrative from a focus on cash flow (EBITDA) to monetizing the balance sheet, an approach traditional CFOs are slow to grasp.
- He compares this to a homeowner taking out a home equity loan to monetize the increased value of their house.
- Ryan McGinnis quotes Ayn Rand, stating that companies can ignore the reality of Bitcoin, but they cannot ignore the consequences of ignoring it, suggesting it could be an “extinction level event” for some.
[00:32:17 - 00:41:09] Escape Velocity and Skepticism
- Dylan LeClair argues that MicroStrategy has already reached “escape velocity,” meaning no other public company can realistically catch up to their Bitcoin holdings or replicate their “BTC Yield” strategy.
- Adrian Morris introduces a counter-argument, playing devil’s advocate by questioning if a prolonged, slow-moving market could allow a competitor to catch up.
- The group discusses the information asymmetry at play. Many investors, unfamiliar with Bitcoin’s fundamentals, may see MSTR’s performance as “scammy” or unsustainable, as Jesse Kobernick points out.
- Grain of Salt dismisses this skepticism, using the MAG-7 as a litmus test: if a finance professional doesn’t know what that is, they aren’t worth engaging with on this topic.
[00:41:09 - 00:51:41] A Pitch Deck to Zombie Companies
- Ben Werkman suggests the earnings presentation is a pitch deck for other “zombie companies”—those with strong balance sheets but no growth—showing them a clear playbook to inject life into their stock.
- Adrian Morris explores what could go wrong, considering scenarios like a dive in the software business or short-sellers trying to attack the stock.
- He concludes that Saylor has created a catch-22 for bears: to bet against the company, you have to participate in its market, which often helps the company’s strategy.
- Jeff Walton shares his own past mistake of shorting GameStop, noting that people who think they are smarter than the market will try to short MSTR without understanding the underlying mechanics.
[00:51:41 - 01:02:45] What Could Go Wrong?
- Adrian Morris continues to test the bear theses, considering a flat Bitcoin price, a major geopolitical event, or “key man risk” if something were to happen to Michael Saylor.
- He ultimately concludes that all the potential tailwinds—more institutional adoption, inevitable money printing to service US debt—far outweigh the potential risks.
- Dylan LeClair dismisses concerns about the software business’s cash flow, explaining that the Bitcoin Treasury Company can generate enough capital from just a few days of ATM issuance to cover the entire company’s annual debt interest.
- Ben Werkman agrees, stating that Saylor effectively told the market they have a $21 billion ATM to cover any short-term cash needs, and it’s a core part of their BTC Yield strategy.
[01:02:45 - 01:12:21] Debunking Key Man Risk
- Ryan McGinnis strongly refutes the idea of key man risk, arguing that the company has reached “inescapable escape velocity” and the hard work is already done. He praises the entire treasury and software teams as “sharp as they come.”
- He contrasts MSTR’s relatively simple mission with Tesla’s, arguing Tesla has not reached escape velocity because its core technologies are not yet fully proven or universally adopted.
- Soleil Nitu offers a compelling theory that Saylor may be using dilution to engineer his own “disappearance,” inspired by Satoshi, turning MSTR into a sort of public trust or “donation to humanity.”
- Jeff Walton adds that even if Saylor’s voting power decreases, no rational shareholder would ever vote against the current value-accretive strategy.
[01:12:21 - 01:24:53] Diet Bitcoin & The Refinery Analogy
- The panel discusses how Bitcoin’s adoption is ironically being supercharged by the very TradFi system it was meant to upend.
- Jeff Walton highlights the slide breaking down different Bitcoin investment products. He notes the convertible bonds offer ~75% of the upside with limited downside, which Mason Foard cleverly calls “Diet Bitcoin.”
- Mason expands on this, explaining that MicroStrategy is a refinery, taking raw Bitcoin and securitizing it into different products (like Diet Bitcoin or “Bitcoin on steroids” via the equity) to suit the different tastes of the capital markets.
[01:24:53 - 01:39:45] Information Asymmetry & The Jargon Barrier
- Jeff Walton tells an anecdote about the insurance industry, where leaders said they would be more likely to accept MSTR’s convertible debt as collateral than Bitcoin itself, highlighting how the traditional packaging makes the asset more palatable.
- Mason shares a story of his 27-page report on MicroStrategy being dismissed by financial professionals who couldn’t get past page one because they didn’t understand Bitcoin’s basic value proposition.
- Dylan LeClair explains that it’s difficult for other companies to simply copy the playbook because MicroStrategy has spent years cultivating a unique, Bitcoin-savvy shareholder base that trusts the strategy and provides deep liquidity.
[01:39:45 - 01:50:30] FASB Rules and The “Saylor Premium”
- Grain of Salt points out the massive knowledge gap, stating most CFOs wouldn’t understand the complex financial terms Dylan uses and many don’t even know about the upcoming FASB accounting changes.
- Jeff Walton explains the FASB rule change, which will allow MSTR to report the fair value of its Bitcoin holdings, likely leading to massive “earnings per share” beats in a bull market.
- Mason Foard introduces the concept of the “Saylor Premium,” arguing that investors trust Saylor because he is the most transparent CEO on the planet and is ethically aligned with Bitcoin’s mission, which is about more than just money.
[01:50:30 - 02:02:45] Monetizing Volatility
- The panel discusses how Saylor demolished the traditional MNAV (Mark-to-Net-Asset-Value) valuation metric by framing MicroStrategy as a high-growth tech company.
- Dylan LeClair emphasizes a key paradigm shift from the call: Saylor explicitly stated that volatility is the product. MicroStrategy is actively optimizing for, leveraging, and selling its volatility to the market via products like convertible bonds.
- He explains that even if Bitcoin’s own volatility decreases over time as it matures, MicroStrategy can simply increase its leverage to maintain the same high level of volatility in its stock, ensuring the strategy remains effective.
[02:02:45 - 02:13:00] The Convertible Bond Flywheel
- Ben Werkman explains the brilliant engineering between the ATM offerings and convertible bonds. MSTR can use the ATM to buy more Bitcoin, which increases the company’s balance sheet capacity to issue more debt, creating a self-reinforcing loop.
- The group speculates that future convertible bonds could be zero-coupon or even negative-coupon (where MSTR gets paid to issue them) due to the intense demand from Wall Street.
- Jeff Walton paints a picture of bond traders celebrating huge bonuses from these products, creating a “FOMO flywheel” as others on Wall Street scramble to get in on the action.
[02:13:00 - 02:22:15] The BTC Principles
- The panel discusses the final slide outlining MicroStrategy’s “BTC Principles.”
- Jesse Kobernick notes that Saylor effectively put a pin in any M&A activity, stating they won’t acquire another company unless it can outperform simply buying Bitcoin.
- Mason Foard compares these principles to Saylor’s “10 Rules for Life,” calling it a transparent guide for any company that wants to correctly implement a Bitcoin treasury strategy. This transparency, he argues, is why no copycat will earn the same level of trust.
Notable Quotes
Rebranding
Bitcoin Treasury Company is a far more applicable name for what they're doing...pulling that to the forefront and making that a direct call out...was a big move in my opinion.
Ben Werkman @BenWerkman
Presentation Style
If you can't get that point across in one minute, why are they going to listen to the next three hours?
Grain of Salt @Z06Z07
Bitcoin in Capital Markets
The big idea is Bitcoin, basically entering all capital markets and no one's done it at the scale. And I think the pitch was as eloquent and refined as it's ever been.
Dylan LeClair @DylanLeClair_
We can ignore reality, but we cannot ignore the consequences of ignoring reality. So it's like, it's just one of those things like this might end up being like an extinction level event for many types of entities.
Ryan McGinnis @ryQuant
Financial Engineering
I think Saylor created financial engineering products in Bitcoin's image. And now it's just like the bacteria is multiplying and he doesn't have to do anything at this point, just sit and watch it evolve.
Soleil Nitu @nithusezni
TradFi Adoption
The thing about it that's so strange is that Bitcoin might hit escape velocity because of TradFi when Bitcoin was designed to upend TradFi. It's a weird dichotomy that's taking place right now.
Adrian Morris @Adrian_R_Morris
The Saylor Premium
The reason that I trust Saylor and that I'm aligned with Saylor is number one, I think he's a genius. And number two, we're ethically aligned...This is more than money.
Mason Foard @Bitdeez
Bitcoin as Collateral
There's a higher likelihood that MicroStrategy convertible debt would be acceptable as collateral before Bitcoin would be acceptable as collateral. And that was like, Oh, my God, are you? That's... crazy to think about.
Jeff Walton @punterjeff
Volatility
The volatility is the valuable thing. You idiots, right? Volatility is the product.
Dylan LeClair @DylanLeClair_
Key Man Risk
MicroStrategy has reached an inescapable point of escape velocity, meaning I believe all of the hard work has already been done and it's not just Saylor.
Ryan McGinnis @ryQuant
Legal Perspective
You can go well below 50% and still maintain effective control...the threat is, OK, there's some shareholder that disagrees with Saylor's direction...they have to rally effectively every other shareholder to go against what Saylor wants.
Jesse Kobernick @TheJesseMK
Questions & Answers
Question 1: What is the significance of the $42 billion, three-year capital plan?
Answer: The panel explained that this plan is a massively bullish signal to the market. It represents a potential constant buying pressure of nearly $40 million per trading day in the first year alone, which could significantly impact Bitcoin’s price. Ben Werkman and others noted that this tells other corporations that MicroStrategy intends to acquire as much Bitcoin as possible, forcing others who are waiting on the sidelines to act sooner rather than later.
Question 2: Why did MicroStrategy rebrand to a “Bitcoin Treasury Company”?
Answer: Ben Werkman stated that the new name is a significant and positive change. The previous term, “Bitcoin Development Company,” was confusing and led people to believe MSTR was primarily building Bitcoin software applications. “Bitcoin Treasury Company” more accurately describes their core strategy: managing a corporate treasury centered on acquiring and leveraging Bitcoin as its primary reserve asset.
Question 3: Is Key Man Risk a major concern for MicroStrategy?
Answer: The group largely concluded that key man risk is not a significant long-term threat. Ryan McGinnis argued that the company has reached “escape velocity,” with a proven playbook and a highly competent team that could execute the strategy even without Michael Saylor. Soleil Nitu added a philosophical angle, suggesting Saylor might even be engineering his own diminished role over time, inspired by Satoshi Nakamoto.
Question 4: How does MicroStrategy create value beyond just the market price of its Bitcoin (the MNAV debate)?
Answer: The panel explained that valuing MSTR on its Net Asset Value (NAV) is flawed because it’s a high-growth company, not a passive fund. Dylan LeClair pointed out that the company actively monetizes its volatility—which he called the true “product”—by issuing financial instruments like convertible bonds. This strategy generates a “BTC Yield” (growth in Bitcoin per share) that compounds value for equity holders in a way that simply holding Bitcoin cannot.
Question 5: Can other companies easily copy MicroStrategy’s playbook?
Answer: While the playbook is open-source, the panel believes it’s very difficult to replicate. Dylan LeClair explained that MicroStrategy has spent over four years building a highly liquid market for its stock and cultivating a unique shareholder base that understands and supports the Bitcoin strategy. A new company cannot replicate this deep trust and liquidity overnight; it would take a full market cycle or more to build the foundation needed to issue convertible debt and run the strategy at scale.
Question 6: What impact will the upcoming FASB accounting change have?
Answer: Jeff Walton and Jesse Kobernick explained that the FASB fair value accounting rule, which MSTR will adopt in Q1 2025, is a major catalyst. It will allow the company to report the unrealized gains on its Bitcoin holdings as part of its net income. In a bull market, this will lead to massive, headline-grabbing “earnings per share” beats, which will attract a new wave of investors and likely force analysts who currently misunderstand the company to re-evaluate their models.
People and Organizations Mentioned
- Michael Saylor: Executive Chairman of MicroStrategy and the architect of its Bitcoin strategy. He was praised for his “masterclass” earnings call performance.
- Andrew Kang: The CFO of MicroStrategy. He was mentioned as confirming the company will adopt FASB fair value accounting in Q1 2025.
- Steve Jobs: Co-founder of Apple. His legendary product presentations were used as a comparison for Michael Saylor’s earnings call.
- Elon Musk: CEO of Tesla. Mentioned as a similar founder-led figurehead who is not a “boring” corporate CEO.
- Tim Cook: CEO of Apple. Mentioned as having publicly stated he owns Bitcoin.
- Mark Zuckerberg: CEO of Meta. Mentioned as having shown interest in the crypto space.
- Satoshi Nakamoto: The pseudonymous creator of Bitcoin. Soleil Nitu suggested Saylor might be inspired by Satoshi’s disappearance from the public eye.
- Brian Armstrong: CEO of Coinbase. Mentioned in the context of banks being unable to custody Bitcoin, forcing corporations to use services like Coinbase.
- MicroStrategy: The subject of the discussion; a business intelligence company that pioneered the Bitcoin treasury strategy.
- Semler Scientific: A smaller public company that has adopted the MicroStrategy playbook, cited as an example of the strategy’s influence.
- Meta (Facebook): Mentioned as a “big tech” company with a large cash pile that could potentially adopt a Bitcoin treasury strategy.
- Apple: Mentioned as a “big tech” company with a large cash pile and whose CEO has shown interest in Bitcoin.
- Google: Mentioned briefly as another major tech company.
- Microsoft: Mentioned as a MAG-7 company and a potential adopter of a Bitcoin treasury strategy.
- Nvidia: Used as an example by Saylor of a company with a technological moat that is difficult to compete with directly.
- Tesla: Used as an analog for a founder-led company. Ryan McGinnis argued that unlike MicroStrategy, Tesla has not yet reached “escape velocity.”
- Berkshire Hathaway: Its “B” shares were used as an analogy for potential future classes of MicroStrategy stock.
- Coinbase: A major cryptocurrency exchange mentioned as a current custody option for corporations.
- FTX / Binance: Mentioned as crypto exchanges that were part of an earlier, less mature model for institutions to get Bitcoin exposure.
- CME (Chicago Mercantile Exchange): Mentioned in the context of institutional Bitcoin futures trading.
- FASB (Financial Accounting Standards Board): The organization whose new “fair value” accounting rules for crypto assets are seen as a major future catalyst for MicroStrategy.
- SEC (U.S. Securities and Exchange Commission): Mentioned in relation to SAB 121, a guidance that prevents large banks from custodying crypto assets.
- JP Morgan / Morgan Stanley: Mentioned as traditional financial institutions that corporations would prefer to work with for custody if regulations allowed.
- Bristol Myers Squibb: A pharmaceutical company where Ryan McGinnis previously worked and advocated for a Bitcoin strategy.
Links Mentioned
- strategytracker.com: A site mentioned by Dylan LeClair that tracks MicroStrategy’s share count and other metrics related to its BTC Yield.