I keep looking at $ASST's new $SATS IPO and one of the most interesting things that I haven't seen a lot of talk about is the liquidation preference. $SATS doesn't have a ceiling or a floor so technically $ASST can issue shares at whatever price they want, but there's some interesting balance sheet math depending on where they issue the shares compared to the liquidation preference. In short, the liquidation preference is the price the $SATS shareholder is owed in the event of a liquidation. The liquidation price can go above $100 in order to protect investors who buy higher, but it can never go below $100. Meaning if you buy it below the liquidation price, Strive owes you more than you paid for it in the event of a liquidation. I don't believe a liquidation event will ever happen, but that doesn't change how issuance is treated on the balance sheet. Going forward let's just assume a liquidation preference of $100 just to explain how it works. If Strive issues $SATS at $90 they are essentially taking out a $100 loan and getting paid $90 for it. The $10 gap is immediately spent from the residual book value of $ASST leaving them with the burden of paying 16.67% per year from a $90 $BTC investment. If Strive issues $SATS at $110 the reverse happens. They are taking out a $100 loan and getting paid $110 for it. The $10 gap is immediately added to the value of $ASST leaving them with the burden of paying 13.64% per year. So, what does this all mean? Strive can now choose its own terms that it wants to take when issuing equity to purchase $BTC. If bitcoin is trading at a deeply discounted price, they can actually spend book value and make a high conviction purchase. If $BTC is trading at an overvalued price, they can create book value while adding more $BTC to the balance sheet. The assumed CAGR of $BTC explodes the closer you get to the 200 WMA and shrinks the further you get away from it. $SATS is a tool that can be used to exploit both.

Let's talk about what a post warrant $ASST looks like. WARNING: This is weapons grade bull fuel, hang on tight. Historically accretive exercises and the aftermath: July 2024 $MSTR Convertible Notes: The notes were converted at ~$39.80 well above the Bitcoin per share value wiping out $650 million in debt and boosting $BTC per share. $MSTR was pinned around $130-$148 right up to the conversion cutoff. The aftermath? Up 25% within 10 days and 3x over the next 4 months. Fall 2024 Metaplanet 11th series warrants: Holders exercised warrants at ¥555 per share while the underlying $BTC NAV was a fraction of that, injecting ~$66M (¥10B) directly into spot Bitcoin and spiking $BTC Yield. 2-6 weeks prior to the exercise being finished the stock was pinned to ¥900–¥1,100 (starting to sound familiar?). It doubled in 2 weeks to ¥2,000 and doubled again in another 2 months to ¥4,000. Similar thing happened with DraftKings in 2020, up 110% in 10 weeks. Same thing with MP Materials in 2021: Pinned to $25-$27 then up 45% over 8 weeks and doubled over 5 months. There's a pin in the price because it's a FN hand grenade, buy accordingly. 4 more trading days left.