Larry Lepard

Larry Lepard from Equity Management Associates sought management's agreement on Strategy's asymmetric value investment profile and its 'unbreakable' nature even with sustained low Bitcoin prices. He also asked if Strategy would consider setting a lower boundary on STRC's yield to provide long-term comfort for investors.

Answer

CEO Phong Le agreed with the assessment of Strategy's resilience, noting Bitcoin would need to drop to $8,000 and stay there for five years to pose a problem for convertible notes. Executive Chairman Michael Saylor added that while the technical bottom for STRC's rate is SOFR, the company aims for it to remain compelling, only lowering it incrementally (max 25 bps/month) if there's an 'avalanche of demand' that risks undermining credit quality, always targeting a stable price around $100. He emphasized the long road ahead for traditional finance to recognize Bitcoin as good collateral, likely keeping spreads compelling.

Larry Lepard affirmed Strategy's asymmetric value investment thesis, highlighting its resilience even if Bitcoin prices remain low, and asked if Strategy would consider setting a lower boundary on the STRC yield to provide long-term comfort for investors.

Answer

CEO Phong Le agreed with the resilience thesis, noting Bitcoin would need to drop to $8,000 and stay there for years to pose a problem for convertible notes. Regarding STRC yield, Executive Chairman Michael Saylor clarified that the rate cannot be lowered by more than 25 basis points a month and would only be adjusted incrementally to maintain the $100 target price. He stated the goal is to keep it compelling for capital attraction, acknowledging that traditional finance's slow recognition of Bitcoin as collateral would likely keep spreads attractive for a while.