MSTR Today: Michael Saylor is going to be Michael Saylor. Thank the good lord...

**John Lee Dumas** (0:00)
Welcome to MSTR Today in the Treasury Titans. It is JLD, it is Saturday, it is August 8th, and nothing in this video is financial advice. And it looks like Michael Saylor is about to do a little operation on the bull. Let's see what he has here in store for us. Well, we all know what he has in store for us. I'm really enjoying these AI memes. This latest one is from APYX.
And yes, we are resurrecting the bull. So, let's go, let's get excited. Because it's August, it's soon to be September, it's soon to be October, and things are soon to be on the move. And I can't wait for days like these candles as we continue to race towards what looks like the Bitcoin sun. So let's keep on driving up as the bull roars. Moving on, we have Michael Saylor right here who is saying that if I were looking for the next billion dollar business in finance, I would study digital credit. And here he is looking at stride at 15%, stretch at 12.6, strike and then of course strife. That's the effective yield. And Michael Saylor says, hey, why aren't you building on that? Looks pretty appealing to me. Strategy says, we have built an all time high USD reserve providing 2.3 years of dividend and interest coverage well above our minimum one year coverage. And there's just actually a great interview today by Fong Lee on some dude's show named Gary. And Gary asked a lot of good questions. Gary came very prepared. It's very obvious to me that Gary knew what he was talking about and he knows a lot about MSTR. So good for you, Gary. It was a really good interview.
But Fong Lee did talk a lot about this. And they basically said, listen, our guidance is only going to get better, meaning they might move the minimum USD reserve from one year to one and a half years, maybe even to two years. And Fong Lee, by the way, dropped a ton of other really great tidbits, mostly just reinforcing the things that those of us who actually follow along already know. But it's always good to kind of hear a little more detail about those things. Moving on to our man, Zaid. This is quite the post we'll strap in for this. Zaid says, Saylor is deluding MSTR shareholders to buy back stretch. Okay, that's not what Zaid said. Zaid is quoting the Bears. What do the Bears say? Saylor is deluding MSTR shareholders to buy back stretch. That's the argument. But let's look at the numbers.
Strategy has raised roughly 7.5 billion through stretch this year alone, with the largest five-day period generating more than 2.1 billion. So far, Strategy has deployed just 106 million towards the stretch repurchase program. Of the 81 million last week, 52 million came from Bitcoin sales and 29 million came from MSTR proceeds. Strategy has 1 billion authorized to repurchase digital credit securities.
This is JLD jumping back in, by the way. During the interview, Fongley did mention that they would definitely increase that authorization if they thought that was the right thing to do, to move it to 2 billion, to 3 billion, to 5 billion, basically whatever it takes.
Even if it ultimately deploys the entire authorization to our stretch, that would still only represent about 13% of the net proceeds stretch has generated this year. At $95, the remaining 894 million of authorization would allow strategy to retire roughly 941 million of stretch's $100 stated value. That's roughly $47 million of stated value retired above the cash spent while eliminating the associated dividend obligation.
Stretch is now back at 95, just 5% below par. Meanwhile, the US Reserve has grown from roughly 800 million to 4 billion, providing an increasingly substantial buffer around the capital structure. And this is something that, by the way, Fong Li mentioned a lot during the interview, is that they know for sure that the retailers very much so care about the US Reserve, and they're going to focus on that. So yes, strategy also raised substantial capital through MSTR to strengthen the reserve, that is dilution. The question is what strategy is building with it. The sentiment on X will lead you to believe that MSTR shareholders are bearing the expense of strengthening stretch. But look at what the market is actually doing. MSTR continues to trade above NAV with NAV currently sitting at 1.07x. The market is willing to fund strategy's capital structure at the premium, despite the reduction in Bitcoin yield required to strengthen the digital credit side of business. Strategy has built a capital structure capable of raising billions through stretch, billions through MSTR, and now has the flexibility to recycle capital between Bitcoin, the US Reserve, and discounted preferred securities. That is what most people are missing. It's not how much Bitcoin yield strategy gave up in the short term. It's what it receives in exchange. Stretch is ultimately the flagship product. Strategy can continue scaling an instrument capable of raising billions of dollars of capital in a week. The cost of strengthening it today could look insignificant in hindsight's mission strategy. And by the way, one thing that Fong Lee also did talk about that was really interesting in this interview, is the fact that obviously they're looking to get rid of the convertible notes either by having them just basically be equitized in the future when the stock price goes up, or in other means if necessary. But they're looking to clear the converts off the balance sheet, and they're definitely not looking to add more. But he also did say, and you know, Michael Saylor has hinted at this, but it's good to hear Fong Lee saying this as well, that they're definitely looking to maybe even clear up the other preferreds and just make it a simple structure, just like strive with one equity, with one preferred, and that's what MSR could be looking at as well. One equity, one preferred, which will be stretch.