Money Stuff: The Podcast

Episode: Flying High in Bird Heaven: MSTR, PSUS, ETF
Hosts: Matt Levine & Katie Greifeld
Date: December 5, 2025

Episode Overview

This episode covers the evolving saga of MicroStrategy (now rebranded as "Strategy"), the shifting dynamics of digital asset treasury stocks—especially in relation to ETF and index inclusion—and the latest in Bill Ackman’s perennial fund-structure ambitions. The hosts blend Wall Street analysis with inside jokes and personal anecdotes, including a heartfelt update about "Bill Ackman the Bird." Themes of financial instrument evolution, market perceptions, and the persistence of unconventional trade structures take center stage, all with the pod’s trademark deadpan wit and sharp financial insight.

Key Discussion Points & Insights

1. The Arc of MicroStrategy (“Strategy”) (04:50 – 15:08)

• Premise: MicroStrategy’s transformation from a software company to a Bitcoin proxy, and its recent struggles as its “premium-to-NAV” trade breaks down.
• Key Details:
  • MSTR’s “Trade”: Previously, MSTR stock often traded at a significant premium to its net Bitcoin asset value (NAV), making raising equity to buy more Bitcoin a lucrative arbitrage (“sell $1 of Bitcoin at $2 on the stock exchange”).
  • Narrative Shift:
    • The premium has shrunk (now about 15%, “it’s not true anymore. The BL is a little off the rose.” – Matt, 05:38).
    • CEO Fong Li suggested that, if NAV falls below 1, selling bitcoin isn’t off the table (06:03).
    • MSTR now building a $1.4 billion dollar cash reserve to secure interest/dividend payments—an ironic twist for a company once touting Bitcoin as defense against fiat “melting ice cubes” (06:31).
  • Matt’s Skepticism: Questions whether the original intent was ever truly about dollar debasement, positing it was always a capital markets arbitrage (07:02).
  • Ponzi Allegations:
    • Ongoing sale of stock to pay high-yield preferred dividends raises “Ponzi” concerns, though the hosts distinguish this from true fraud (“I would not personally use the Ponzi word about this trade… it’s all pretty transparent.” – Matt, 09:28).
  • Decision Framework: If stock trades at a premium, raise capital via equity; if at a discount, sell Bitcoin.

Notable Quotes

• “There is something Ponzi-like about selling stock to raise money to pay the 10% return that you promised previous investors.”
  – Matt Levine (09:28)
• “Can you imagine Michael Saylor saying, we might have to sell bitcoin? I cannot. I cannot.”
  – Katie Greifeld (12:08)

2. Index Inclusion and the DAT (Digital Asset Treasury) Conundrum (12:43 – 16:36)

• MSCI’s Review: Mid-October, MSCI proposed possibly excluding digital asset treasury companies (DATs) from its indices, questioning if they are more like investment funds than operating businesses.
• Why it matters: Removal would hurt demand for “Strategy” shares, especially from passive/index investors.
• Disagreement Among Indices:
  • NASDAQ 100 decided “Strategy” is an operating company and kept it in; MSCI’s verdict pending.
  • Implication: Index provider decisions are susceptible to market sentiment and performance cycles.

Notable Quotes

• “Who is that audience? ... Passive equity investors who will buy the index. And if you cut out that, then you lose a lot of demand…”
  – Matt Levine (13:31)
• “You could have a situation where MSCI is treating Strategy one way and NASDAQ is treating it another.”
  – Katie Greifeld (14:35)

3. "Bill Ackman the Bird"—An Unexpected In Memoriam (16:41 – 18:28)

• Katie recounts the passing of her beloved rescued bird, named (jokingly) "Bill Ackman" after the famous hedge fund manager. This personal note acknowledges listeners who have asked for updates, confirming the bird’s passing but celebrating their brief time together.
• Clarification for new listeners: "It was not the actual hedge fund manager Bill Ackman. It was just the bird.” (Matt, 17:41)

4. Bill Ackman, Closed End Funds, and Structural Finance (18:28 – 24:28)

• Ackman’s Ambitions: Again attempting to launch a US-listed closed-end fund, aiming for $5 billion (less ambitious than his prior $25 billion target).
  • Sweetener tactic: Investors will also receive shares in Pershing Square Capital, his management company, during the IPO.
  • The Premium Challenge: Closed end funds rarely trade permanently at a premium—his European fund currently trades at a 25% discount.
  • ETFs vs Closed End Funds: Debate over why Ackman doesn’t use an ETF wrapper. Matt argues the closed-end structure provides the “permanent capital” crucial for his investing style.
  • “Howard Hughes” Pivot: As an alternative, Ackman has been directing efforts through his massive stake and chairmanship in Howard Hughes (a public real estate company), transparently aspiring for a “Berkshire Hathaway” model.

Notable Quotes

• “Bill Ackman has to kick in some value to make the shares worth more than what people pay for them. But still people pay more than what goes into the pot. That’s the plan.”
  – Matt Levine (19:27)
• “ETF is just not permanent capital. It doesn’t solve any of the problems he wants to address.”
  – Matt Levine (21:34)
• “I don’t really understand what the distinction is between Howard Hughes and the new closed end fund.”
  – Matt Levine (24:17)

5. M&A in ETF Land: Goldman Buys Innovator Capital (26:31 – 31:26)

• Goldman Acquisition: Katie, who broke the news, explains Goldman’s $2 billion purchase of Innovator Capital (known for “buffer ETFs”).
• Buffer ETFs Explained: Financially engineered products offering capped equity upside with buffered downside, achieved via options and Treasuries.
  • Originates from the “structured notes” business—Goldman can now “etfize” these products, expanding their reach.
• Industry Context: Innovator’s founders, Bruce Bond and John Southard, are serial ETF entrepreneurs (they also founded Powershares).
• Critiques: “Friend of the show” Cliff Asness vocally argues you should just “buy less stock” rather than pay for buffered exposure—echoing widespread skepticism toward structured notes and buffer ETFs.
• Strategic Rationale:
  • Goldman’s own buffer ETFs floundered; buying Innovator is a shortcut to scale.
  • For big ETF upstarts, the Innovator story is the “blueprint” for a successful exit.

Notable Quotes

• “If you’re Goldman, you’re constantly coming up with ideas for how to sell weird volatility products to people. And with an ETF business, you, like, massively increase the audience…”
  – Matt Levine (28:50)
• “It’s so easy to launch an ETF, and it feels like everyone… this is the blueprint. I have to imagine for a lot of them, this is like the lottery ticket that they’re hoping to find.”
  – Katie Greifeld (31:10)

Timestamps for Major Segments

| Segment | Description | Start Time | |---------|-------------|------------| | MicroStrategy/Strategy’s Corporate Trade Arc | The arc from premium arbitrage to reserve-building | 04:50 | | Discussion on Index Inclusion for DATs | MSCI and NASDAQ treat “Strategy” differently | 12:43 | | Remembering “Bill Ackman the Bird” | Personal and lighthearted in memoriam | 16:41 | | Bill Ackman’s Fund Ambitions | Closed end funds, sweeteners, Howard Hughes | 18:28 | | Goldman Buys Innovator Capital | Buffer ETFs, industry strategic context | 26:31 |

Tone & Style

The episode fuses technical finance insight with a dry, often self-aware wit. Matt Levine blends skeptical analysis with explanatory asides (“I do not believe that when they announced the strategy, it was about the debasement of the dollar…” – 07:02), while Katie Greifeld grounds discussion in news breaks and occasional heartfelt asides, particularly around “Bill Ackman the Bird.” The interplay is sharp yet light, keeping sophisticated financial discourse accessible and engaging.

Memorable Moments & Quotes

• “If you sell a lot of stock every quarter and you use most of that stock to buy bitcoin in an accretive way, and you use some of the stock to pay interest on your debt, then like, yeah, whatever, it's fine, Right?”
  – Matt Levine (08:15)
• “This is a capital market strategy where people wanted bitcoin and they're like, we're going to give the people what they want.”
  – Matt Levine (07:02)
• “He really has got it in his head that he wants to do a closed end fund in the US that trades at a premium. And he hasn’t yet, but he’s working on it.”
  – Matt Levine (18:40)

Summary

This episode masterfully threads together the unraveling MicroStrategy “strategy” narrative, the immense significance (and tension) of index provider decisions for crypto-proxy stocks, the idiosyncratic determination of Bill Ackman in seeking fund-structure alchemy, and the continued innovation (and consolidation) in ETF manufacturing. Along the way, Matt and Katie maintain a lively, occasionally poignant rapport that makes even the most arcane financial engineering feel relevant and, at times, downright entertaining.