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KAOBOY MUSINGS and its associated podcast KAOS THEORY focus on the intersection of Financial Markets, Macroeconomics and Geopolitics. I've spent 30+ years as a trader/hedge fund manager and now manage money for my family office across many asset classes.

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Michael Kao

Jul 12, 2023

2/16/21 - Re: MSTR-GOAT or Goat?

Re: MSTR-GOAT or Goat?

Michael Kao

February 16, 2021

Here is a compilation of early Tweets I wrote about MSTR levering up to buy BTC: 2/16/21:Kaoboy Musings is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber. I know the Lord of Cyber Hornets is a genius, but at some point I predict that someone is going BK by levering up to buy a hyper-be…

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4/23/21 - Re: MSTR-A Real Options Analysis.

Re: MSTR-A Real Options Analysis.

Michael Kao

April 24, 2021

Some definitions first. In this debate, I differentiate REAL options from FINANCIAL options in this way: capital structure confers real optionality on a firm’s enterprise value, whereas financial options are the equity derivatives we all know and love.

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4/29/21 - Re: MSTR-More Real Options Thoughts.

Re: MSTR-More Real Options Thoughts.

Michael Kao

April 30, 2021

Here is the question: If the bond investor is “short a put” and the equity investor is “long a call," isn’t the company/issuer “long a put” and “short the call"? Technically, the answer is “Yes,” but practically speaking, the company is 99.9% incentivized the same way as investors.

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5/19/21 - Re: MSTR-Painting Targets & The Negative Gamma Cascade.

Re: MSTR-Painting Targets & The Negative Gamma Cascade.

Michael Kao

May 20, 2021

Re: MSTR-Painting Targets & The Negative Gamma Cascade.

Quoth he his AM: Except as a steward of publicly traded company along with a board of directors charged with the same fiduciary duties to shareholders/creditors, the decision to HODL a 100%+ vol asset might be wrested out of his hands at the most inopportune moment.

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1/30/22 - Re: $BTC/Oil/USD/$MSTR-Tying It All Together & The “Ummwut” Umwelt.

Re: BTC/Oil/USD/MSTR-Tying It All Together & The “Ummwut” Umwelt.

Michael Kao

January 31, 2022

Re: BTC/Oil/USD/MSTR-Tying It All Together & The “Ummwut” Umwelt.

Last year I got captivated by octopuses (these things happen) and read several books on cephalopod consciousness, and an interesting word caught my eye: “Umwelt.” “Umwelt”: “the world as it is experienced by a particular organism.” For instance, it is hard for us vertebrates to envisage the umwelt of an octopus that has invertebrate, distributed intellig…

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5/3/22 - Re: MSTR-The Tail Wagging The BTC Dog?

Re: MSTR-The Tail Wagging The BTC Dog?

Michael Kao

May 4, 2022

MSTR just reported Q1'22. Here’s an updated capital structure: Debt: Silvergate SOFR+3.7% due 3/23/25 -- $205 mm Senior Secured 6.125% due 6/15/28 -- $500 mm Convert 0.75% due 12/15/25 -- $650 mm Convert 0% due 2/15/27 -- $1050 mm TEV: Total Debt -- $2405 mm

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5/16/22 - Re: BTC/Crypto: The Beginning of the End of the Liquidity Lottery.

Re: $BTC/Crypto: The Beginning of the End of the Liquidity Lottery.

Michael Kao

May 17, 2022

Re: $BTC/Crypto: The Beginning of the End of the Liquidity Lottery.

I’ve already written at length about BTC/Crypto valuation in several threads. You can find a directory of them here:

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11/2/22 - Re: MSTR-Capital Structure Update.

Re: MSTR-Capital Structure Update.

Michael Kao

November 9, 2022

Here’s an updated capital structure: Debt: Silvergate SOFR+3.7% due 3/23/25 -- $205 mm Senior Secured 6.125% due 6/15/28 -- $489 mm Convert 0.75% due 12/15/25 -- $640 mm Convert 0% due 2/15/27 -- $1032 mm Other — $11 mm

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