B (2:11)

I just said I was standing on a pier in a. In a place with clammy weather. How's that?

C (2:16)

Oh, that sounds great.

B (2:17)

As far as I know, there are no clams here, but it's clammy weather, so.

C (2:21)

Awesome. So look, so look, everything changed yesterday. It really did. The fact that they. Not only did strategy say that they're willing to sell Bitcoin to be efficient in their share price in acquiring Bitcoin. While that was huge for strategy, it's huge for all the Bitcoin treasury companies because now they can fix whatever happened in the past, and you just can't Sell Bitcoin and just say, oh, now things are better. They have to have a plan going forward, they have to have their structure, they have to have their narrative and their metrics have to follow through. And so this was a, this was a really big deal. It's not about acquiring the most bitcoin, it's about acquiring the most bitcoin efficiently. And so if you acquired it at a low M nav or at a high price, you could sell those book, book a tax loss and you could buy back your shares and, and for strategy, you could also retire some of the converts and that would be detrimental to the shorts and that would be beneficial to, to the stock price.

B (3:21)

You know, it's fascinating to me, grain along the lines of what you're saying to watch the evolution of Michael Saylor over the past several years. And what I observe is he began in 2020 on a path and pivoted his company multiple times. And then he would jump into something, begin the bitcoin treasury journey, pivot further once they, they learn something. Pivot further once they learn something. Of course, the latest Pivots, he went from converts to Preferreds, then the layers of Preferreds, then the focus on Stretch and then latest and the latest again, the semi monthly dividend proposal for Stretch, which, by the way, I voted my shares for. And now you have yet another pivot, which is we would be prepared, if it benefited the shareholders, to part with limited amounts of Bitcoin and select situations where it was good for the value of the company overall. Some people think of Pivot as a bad thing. What I think of it as is a company that's incredibly innovative and very, very flexibly pursuing an inflexible goal, which is to use this incredible new, powerful digital capital to create tremendous amounts of value and also, by the way, along the way, bring savings opportunities to everyone who didn't have them before. So to me, that gets. When you talk about, I spent a minute ago talking about the process of the earnings call, but what I actually admire about what the leadership of that company is doing is they are prepared to pivot again and again and again in service of a powerful goal that motivates them. It's impressive.

C (5:14)

It really is. There's this guy, Michael Sullivan on X that did analysis on how they use terms and he looked at Peter Schiff and Michael Saylor and he did this analysis over time to see what happened. I think that if anybody was to look at Fong in December of last year and December is not that long ago, it's basically less than five months ago when they decided to acquire cash. So bitcoin had dropped in price. And what happened is if you looked at the way Fong was sitting in his chair, sentiment analysis, he was kind of like it was a bummer time to be. October 6th, we had an all time high of Bitcoin in 2025. October 10th, the price of bitcoin had started crashing due to something completely unrelated to bitcoin with Binance. And so what happened was as that price dropped and then they decided to acquire cash, their overall sentiment and demeanor, it was like they, they pivoted just like you said, Tad, and they acquired $2.25 billion in cash. And they hadn't done that before to keep that on their balance sheet. And there was a lot of speculation about why they did it, but they didn't look happy about it. And I was at both Strategy World and then I was also at, at the bitcoin conference and I spoke to Fong multiple times. Not private conversations. They were, they were public, you know, out in public talking to him. Other people were around me and his demeanor was completely different. He stood up like this. He was happy, super outgoing and, and I didn't know what they were going to say last week. And now, now knowing what they said yesterday, it all makes sense because they knew that they had this pivot in hand and what they were willing to do. And they're look, they're, they're looking forward very positively. And I think that, like you said, is that just because you pivot, it's the evolution. How do you adapt to changing market conditions? And that's what they did. And not only did they do it for strategy, they did it for the other. The other companies now have a tacit approval to sell bitcoin and it comes back to shareholder value. This is the key takeaway. This is the most important point. It's not about acquiring the most bitcoin, the company with the most, the most publicly traded company, very important publicly traded company. The most Bitcoin is not the one that wins. It's the company that has the best shareholder value. It's acquiring bitcoin the most efficient way possible. Having the most bitcoin per share is the most valuable company. You can't destroy shareholder value. And that's what they signaled that they're

B (7:44)

going to do very clearly.

C (7:45)

So I'm very excited about it.

B (7:46)

Yeah, they've been very, very focused on shareholder value from the beginning. And by the way, they've been torched multiple times over Many, many months about dilution and all the different things. And so I have to imagine there are periods where it hasn't been all that much fun. And clearly when bitcoin is sitting at 60,000, it's a heck of a lot less fun than when it's sitting in the low 80s and it's breached the bears first line of resistance. So from my perspective, there are lots of reasons to be positive if you are the management of strategy. And the only other thing I would say is that maybe pivot was not the best chosen word. As I reflect on it, some would call that innovation, meaning they innovate and they continue to learn. Innovate. And there's this old thing that I've learned a million years ago, called it an OODA loop. O O D A Observe, orient, decide, act. What's really impressive to me is that the difference in time now with strategy and its leadership between the observation and the action is shrinking dramatically and that is only accelerating their strategic mode. In other words, when you first set out and you think about back In August of 2020, they observed, they oriented, decided and they acted. And I think if I recall the story correctly, it took him probably seven or eight months to get everybody on board to do the first real purchase in that whole process. And you compare that to how rapidly the leadership and the board and all that observe, orient, decide and act today and it's spectacularly different. They have shrunk time to a very, very, very small amount. And if you want to ask me what a lot of people point to, the fact that their bitcoin hoard is a significant moat, I agree. It's hard to argue with that. It's a traditional significant moat. But step back and look at the rate of innovation, the rate of the speed at which they can create new products, the speed at which they adjust their strategy, always, as you say, grain with the right goal in mind, which is maximizing the long term value of the common shares and the company. And all of those things are happening faster and faster and faster. And that is probably the second most important strategic weapon that it has beyond just the competitive vote.

A (10:21)

Tad, I'd like to get both you and Green's reaction to the statement on the earnings call where they said putting bitcoin on the balance sheet is a two hour meeting, it's a board level decision, but putting stretch on the balance sheet is a CFO decision. They might not even talk to the CEO or it might be a five minute conversation. How much of a difference maker is that? What's your response to that?

B (10:46)

Go ahead. Grain.

C (10:50)

I was going to leave that to you because you actually run a public, you ran a publicly traded.

B (10:54)

Yeah, I've been in charge of two. But go ahead.

C (10:58)

Let me reframe this tag. If you're, if a CFO came, let's say you read something, an article that was published and your CFO that you had hired years before and they were doing great, and you found out publicly that he bought STRC on your corporate balance sheet, but he did not tell you. How would that go?

B (11:18)

It'd be a very interesting conversation. A very interesting conversation. And I also sit as chair of two audit committees of public companies now. And that would be an interesting conversation to say the least. Well, the answer to your question shows you, Tim, how much in alignment and how much mutual preparation and focus there is at the organization, meaning the stuff that other public companies right now would call revolutionary, they call Tuesday.

C (11:57)

Right. Right. So, so I'm going to put. So, Tad, I'm going to push back a bit on this because I'm so happy that we have a person that's run publicly traded companies and you sit on two audit committees. If the, if you want, you go to the cfo. Hey, look, I just found out that you bought STRC on the balance sheet. What was your decision process? And I'm going to role play. I'm the CFO and I'd say, Tad, I decided to take 5 or 10% of our balance sheet and to put it into STRC. It pays 11.5%. It's over collateralized forex on Bitcoin. It's a publicly traded company. I think it'll get a credit rating. And we also think that it's going to have semi monthly payments coming in. And given that spread between SOFR and what they're paying, I thought it made sense to right size and acquire 5 or 10% of our balance sheet into this. Do you think, Tad, do you think that I was being responsible?

B (12:51)

So you notice I didn't answer that question. Grain. I know. You know very well I didn't answer that question. I answered a different question, which is the one I wanted to answer. I know, but I will say this. I just bought a company, the family and I just bought one last week. And so this is. But it's private and it's controlled by us. We will be putting stretch on the balance sheet.

C (13:15)

Okay. So did you have to convince anybody else to do that or was it, you know.

B (13:19)

No, I haven't even. But remember, I'm the controlling shareholder. So at some point, I guess I'll have to speak to my wife about it, but she knows what stretch is and she'll be strongly in favor of it. I will certainly advise the other shareholders, but it won't be a consultation, it'll be an advisory. And I don't mean that meanly. I'm just saying it is safe enough that for a controlling shareholder in a private company context, it's not really something that's terribly controversial in my opinion.

C (13:53)

But again, okay, remember that.

B (13:54)

Right.

C (13:55)

Let me interrupt you for a second, what you just said right there in the past 20 seconds, that this is not controversial.

B (14:03)

And you, in a private company context, where I'm the controlling shareholder in a

C (14:06)

private company, where the control. Was that the same, or over the past 30 days or past 90 days, did your opinion change?

B (14:16)

No, but there's a crucial assumption. Let's talk about the crucial assumption. And by the way, it's a crucial assumption that Saylor and his part of the earnings call gives a sincere nod to, which is there is a strong point of view that Bitcoin is going to zero, period. And by the way, it's not a small cohort, it's a large cohort. And in that context, where you have a significant proportion of shareholders and or board members who believe that there is a material chance that Bitcoin's going to zero or a material chance that there'll be some sort of catastrophic footfall at strategy or any of those things. And Therefore, unlike a 4% money market from a large federally insured bank, that's a different level of risk. And in that instance, and particularly in a public company context, that does present challenges. And those challenges are very real and they need to be respected by the board and audit committees and frankly, management. But what that means is. And by the way, this is not a news flash, because not only did Saylor acknowledge that in one of his scenarios where he said, if you believe Bitcoin's going to lose 10% per year forever, well, then it's this thing. And he said there are people that believe that. And by the way, remember that if we play the tape back to 2020, that was his board. His board. Do you remember his descriptions about. About how he had to start with, about his CFO's reaction the first time he ever brought it up, or the general counsel's reaction. And that was when he brought it up. And by the way, he was the controlling. Is the controlling shareholder of what was then called MicroStrategy when they embarked on this mission. So you have to have a significant amount of respect for the board process and the financial process and the fiduciary responsibilities of all the players before you put Stretch on the balance sheet. Notice I'm bought in to bitcoin. I'm bought into Stretch. I'm clearly bought into strategy and what they're trying to do there. And it's a private company context. And moreover, I know that the shareholders that are along with me for the ride are. Even though. Well, in fact, almost all of them are along for the bitcoin ride anyway. So for me, it's uncontroversial. So I hope that was a clearer answer to your question.

C (16:55)

That's a better answer, Tim, if you can give me just some. Because Tad's on the call, I have a quick anecdote that happened at bitcoin conference, and I want you to speculate about credit ratings. So I was talking to Maurizio de Parta, de Partolomo, and he's the CEO of. Of Leden Led. And I don't get paid by Leden. I'm not involved with them. But I met him at the bitcoin conference. And why am I bringing this up? They got a credit rating when they loan against bitcoin from the rating agency. And so they did this, and they have a cash buffer and they have a way to auto deleverage. So I went, I talked to him, said, congratulations, you did this. This is awesome. And I said, can strategy get a credit rating on strc? And by the way, I was on a call this morning just by chance with Maurizio, and. And he said, that might be kind of hard. And I go, well, why would you say that? He goes, because strategy has said that they will never sell their bitcoin. And what a credit agency wants to hear is that in the event that bitcoin goes to zero or that it's dropping, that they would be willing to sell. And I said, oh, that's interesting. I never looked at it that way. So now we have to hear. I don't know if we lost Tad, but now that we. We've heard the information yesterday from strategy that they're willing to sell bitcoin, do you think, first of all, do you think that's plausible that a rating agency looks at the willingness for them to sell an asset and the fact that they're now willing to sell that, does that increase their chances of getting a credit rating on strc?

B (18:27)

No, that one was for Tim or me.

C (18:30)

That was for you or for Tim. I mean, Go ahead, let's let Tim

B (18:33)

do it because I lost you right in the middle there. I think I got the gist of the question, but let's have Tim answer.

A (18:40)

I find it hard to believe that the team is not being thoughtful about how to achieve a credit rating. You know, certainly the market is pricing how they feel about the products, which is stronger than you might think in the near term. But in the medium to long term, certainly we all want the credit rating agencies involved to get to that next level of capital.

B (19:05)

Credit rating is game changing for them. Because think about just the prior question you pushed on grain and got me to answer even though I didn't want to. The process of getting people on board when they either don't know about or are skeptical of or positively opposed to Bitcoin and concept, whatever the case might be, think about how much easier that process is if they say, well, did you know that we're rated X by these firms whose job it is to rate or provide insight on credit risk? And that particular product is rated Y by these firms. And these firms are reputable and you've known them and some of them have been around for almost a century. So you look at that and you say it eases the path. And the most important path, in my opinion that Song and particularly Saylor are on is an educational path. They're having to educate millions and millions of people. And by the way, they're doing a damn good job of it.

C (20:12)

I mean, I think they are. And you know, one of the questions that came to Saylor was they asked him what regulatory change has to happen that you're looking forward to that would really help you. And he said because the prefs are been around for 100 years, there's really, that is settled law and regulations. What he did say was the basel amount of collateral that you have to have the 1,250%. He said that if that was the change and it was to be. Oh, he used a French word. Pat, you're going to tell me in a second. Paraticia. I can't think of the word parapassou. Parapassu, sorry, use the word parapassu with gold. And I was like, that's really the only thing that he, that he really is looking forward to. From a regulatory perspective. The rating age is something separate. But I think that like you've said, Tim, they've looked at this from every angle and I think, I think this was. I don't think people realize, or maybe they do realize, and they're in shock. That this was a huge deal what they announced yesterday and I think you're going to see it reverberate through the bitcoin treasury space and even for other digital asset treasury companies over the next days, weeks and months. I think this is a major shift that just happened.

B (21:25)

Yeah, it's a big deal. In truth it shouldn't be. But sometimes education, certainly for me, sometimes educating me is a really hard process and they've done a lot of educating of me and I'm thankful for it.

A (21:47)

So Tad, and then Mike, how would, how would you hypothetically, hypothetically think through treasury management as far as cash, Anything else you want to throw in there? I. I dare not say treasuries but the cash and any. Would you potentially pick a basket of the preferreds of the digital credit or

B (22:09)

just so I'll just tell you, I, I don't provide financial advice, you know, you guys know that. I, I'll just tell you what I do because that I can speak to which is my short term cash that isn't literally going into being, isn't going to be paid out and call it within a week or so or just a few days is sitting in stretch short term cash, medium term cash, by which I mean call it three to five years is sitting in strike and then very very long term cash, cash that hopefully will be around for the kids or something and hopefully not soon, God willing is in the common stock. That's how I think about it.

C (23:02)

Yeah.

B (23:03)

And by the way, the reason strike is because it is a. As far as I understand what I bought was a perpetual non callable convertible preferred share that is currently yielding 10 percent on a quarterly basis, heavily collateralized on the balance sheet against Bitcoin or at least that's what the company says and it appears to defend it in the earnings calls which is legally required that they tell the truth. And I can convert those shares into a fraction of a microstrategy, sorry a MSTR common share forever. And did you hear the part? Did I mention non callable? I think I said that. So that's pretty good. So somebody's gonna pay me 10 +% if I buy a strike today on the market right now and I buy one today. I think you guys could check. I don't have a. I'm using my phone for other things but my guess is it's 10.3 or 10.4% plus or minus. You guys could check. They're going to pay me that on my dollar quarterly and by the way for a very very Long time and maybe I never convert but they're not going to be able to call it and I'll have an open ended call option on Strike on microstrategy chairs forever. And by the way, is it any surprise that there's not too much strike out there? Well, it's because Saylor and Fong are really smart. They figured out they gave us too good a deal. It's pretty rich. So that's why I buy it.

C (24:34)

Yeah. I think your last point is probably the biggest point about is about Strike is that they probably. Why would they want to sell that? Because that's the whole reason why they got rid of, why they're trying to get rid of the converts now is that that's a really good deal for strike holders. I don't own any Strike. I'm not giving any financial advice. But Tim, I took your question as you know what would be the cash management for bitcoin treasury companies? I didn't take it what I do personally. So I'm a little bit more aggressive than what Tad does. My short term cash is basically in Mag 7 companies and it's.

B (25:08)

You take on far more risk than I will.

C (25:10)

Yeah.

B (25:13)

I don't know about you, but I think anthropic's eating the world. Some of those. Sure. I mean I'm a huge fan. Again, not financial advice. I'm a huge fan of Tesla, but I, I don't know when was the last time you actually used Microsoft Grain?

C (25:27)

That's true. I don't have a. Okay. I have very little micro I don't want.

B (25:31)

Okay. Well I'm not going to parse you to pieces here, my friend. You're too good a friend. But yeah, but I don't think you're actually in the Mag 7, honestly, respectfully, I think you probably pick your favorites.

C (25:43)

That is true. That is true. But Tim, I'll go back to what I thought the intent of your question was. Look, if Bitcoin runs to 100,000, the ability to take that tax loss goes away. Now it's like, yeah, but the price of bitcoin went up. So the bitcoin treasuries companies go up. So what Tad was saying earlier about your timeframe, not only do you have to innovate and Tad, I do like the way you change from the word pivot to innovate. Pivot sounds like you're under duress or under stress to make a decision, whereas innovate sounds you're being proactive. So if there's a bitcoin treasury company. Listen to us now. If you wait until bitcoin goes to 100,000 or 125,000, you can't book that tax loss and then rebuy back your shares. And so there's an expiration date on the ability to do this. So do I think that Strategy will dump 10,000 or 20 or 50,000 shares all in one fell swoop? Unlikely. But they have to do this sooner rather than later because I think the bottom's in. I think Bitcoin is going to continue to go higher. And I. And it gives them the optionality to buy back those shares to boost the stock stock price. That's why companies do stock buybacks. It reduces the denominator. And I'll take, I'll wrap this up with one second. When somebody says P E ratio. So it's the P is over the E, but the. They forget with the E it's earnings per share. It's P over earnings per share. So when you decrease the amount of shares, in theory, your multiple goes up. Right, because you have less shares outstanding. Either your multiple goes up or your price goes up. It could, it's not a guarantee. And that's what they're trying to do by buying back their shares. But if you, you can't wait six months. If Bitcoin's at 125,000, that's great. But you can't take advantage of that tax loss. And so I think that if companies listen to this, they have to make decisions faster. It's not about. Oh well, we could just wait. You have to make your decision with the best information on hand at that time.

B (27:47)

Brain. Tim. I love you guys. Thank you for inviting me on. It's been a treat. But I've got a call starting in one minute and I have to earn some money to buy some more stretch and buy some more strike and buy some more mstr. So if you all will excuse me. I wish you every success.

C (28:04)

Dad. Same thing. I just want to pay you a compliment. That is a phenomenal jacket that you're wearing.

B (28:09)

Thank you. Thank you.

C (28:11)

That is.

B (28:12)

All right.

C (28:12)

I'm not gonna ask you what brand it is.

B (28:13)

Listen, I, I, I, the only thing I want to say is if I have to be wearing a jacket, then I'm probably in the wrong place.

A (28:22)

Thanks for joining us, Ted.

B (28:23)

Really appreciate it. I really appreciate the invite you taught you two the best. It was, it was terrific. And keep out all the great work, you guys. I made the comment earlier about the importance of the education and thank goodness you guys are help educating people like me. 3. Appreciate it. Bye bye.

C (28:37)

Thank you. Have a great day.

A (28:38)

Thanks, dad. All right, Grain, any closing thoughts before we wrap this up?

C (28:44)

Yeah, I want to say, you know, thank you for the invite. I know I joined late. I, I was, I was combing my hair and getting ready. I had no idea Tad was going to be on. And, and look, this was a major change that happened yesterday, not only for strategy, but for all the bitcoin treasury companies. And I think you're gonna see the rate of change is going to accelerate and people will innovate even faster now. And I think this is great for the industry. It's great for bitcoin, it's great for strategy. There are other companies that will do incredibly well with this and I wish them the best. And thank you for setting up this quick call.

A (29:20)

Awesome. Thanks, Green. We'll talk to you soon.

C (29:23)

Take care. Bye.

B (29:24)

Bye.

A (29:27)

And I am going to the airport tonight. I'll be over at the MAD Bitcoin summit in Madrid next Monday and Tuesday. So if you're in Madrid or you want to fly to Madrid at the last minute, go to madbitcoinsummit.com grab a ticket. And at the end of this month, the inaugural Bitcoin Treasuries Unconference UK is happening in Bristol along with Bitcoin Treasuries Media and the smarter web company. So look forward to seeing everyone in Madrid and in Bristol. And we will see you on the next episode.