I have read the latest announcement from MSTR They are continuing to prove their financing ability, increasing their cash reserves, and calming the market .. Actually, there were obvious traces of FUD STRC on X last Thursday and Friday. Last Friday, GROK summarized the comments on X (Figure 1), which roughly stated that the MSTR STRC financing model cannot be continued. But the logic behind it is mostly untenable. It's all about driving emotions. FUD is obvious. ------------ So let's take a look at what was said in their SEC filing this week. Last week, 335 million yuan was raised through selling common stocks. I only spent a small amount of money for 2 miles, which is only 35 million to buy 520 BTC. The remaining 300 million was saved as cash and added to their cash reserves. As of June 21, their cash reserve of 1.4 billion yuan is used to pay dividends on various preferred stocks. Previously, due to the repurchase of some convertible bonds, their cash reserves were reduced to only 8 months of interest payment. So it sparked a wave of FUD. And in the past few weeks, they have been increasing their cash reserves again. In the first two weeks, we had a weekly reserve of 100 million yuan, but last week, due to the FUD controversy, we directly added 300 million yuan to the reserve. In the past few weeks, we have been relying on selling common stocks to raise funds, but since the face value of STRC has not returned to around 100, the STRC financing channel has been put on hold for now. (It's not cost-effective to have STRC interest rates above 11.5%) Because the face value of STRC did not quickly return to around 100, the large sum of 2 billion yuan that will be raised in a week in May cannot be financed. With such high interest rates now, continuing to melt STRC would accelerate suicide. Due to the shutdown of STRC, financing can only be obtained through selling common stocks in the past three weeks. (As long as mNAV is still greater than 1, it can continue to be sold, the most cost-effective financing) And recently, their announced mNAV (which is still based on MSTR's own caliber and has some moisture because they put preferred stocks in the numerator) is around 1.11. Barely on the edge of undiluted. So they are providing funds by selling common stocks. ---------- So how do we look at it when combined? 1. There is still some distance to go before a thunderstorm in the near future (ordinary stocks can still raise money, and there are 1.4 billion yuan in cash that can pay at least one year's interest) Recently, MSTR's purchasing power has indeed been limited (STRC cannot continue to raise funds through STRC if it does not return to around 100). If mNAV continues to be around 1.11, the common stock can only slowly raise some interest money and cannot sell for a large amount of money. The current situation is not as dire as in 2022 (when mNAV reached 0.7, they had to raise funds through convertible bonds) However, it should be noted that the mNAV on their official website is a whitewashed mNAV, which differs from the pure mNAV (which is slightly over 0.8) The difference between the two is that pure mNAV is the ratio of ordinary stock market value to BTC market value. The whitewashed mNAV is (common stock+bond+preferred stock - cash)/BTC The most dangerous situation in the future is that STRC will not return to 100 for a long time, BTC prices will continue to fall deeply, and MSTR stock prices will not even go up. Even the whitewashed mNAV will remain below 1 for a long time This is the simultaneous closure of financing channels. But this also won't explode in the short term. Their cash reserves can still last for one year. If such a situation arises, a foreseeable explosion scenario would be. This situation persists for more than 6 months, causing them to lose their financing ability and gradually deplete their cash flow reserves, decreasing from over 1 year to less than 6 months. And no new financing channels have been found. Moreover, BTC prices have remained consistently low (such as 4-5W or lower) over the past six months. The stock price of MSTR cannot rise, and there are no people who want to buy MSTR at a low price. For example, if there is a liquidity crisis in the US stock market. That may be the time when there is really a big risk involved. Obviously, the past few weeks haven't been so miserable. Although three weeks ago, their cash reserves were only eight months. But in the past three weeks, they have proven that in the current market environment, they can still raise money by selling common stocks (the US stock market has not collapsed, market liquidity is still good, and some people have faith in buying MSTR stocks). ） So in the past few months, there hasn't been any risk of them detonating mines yet. And the 8-K announced this week, what they want to convey to the market is this: With over 60000 BTC, we can still raise 300 million per week. Don't panic.