MSTR's heavy dilution and use of proceeds to repurchase STRC instead of buying Bitcoin is bearish; the stock's downside beta is worse than its upside.

And we might even touch on Micro Strategy. What did they do recently? They diluted their stock heavily, but what did they do with the cash? Did they buy Bitcoin or did they do something else?

Now, let me show you something with Micro Strategy. This is not the best uh let's just say information, folks. When it comes to Micro Strategy, Micro Strategy, they're a, in case you were wondering, large Bitcoin holding company.

You probably heard of it unless you've been under a rock, folks. So their business model, buy a bunch of Bitcoin, sit on it. You know, you buy the stock, it's supposed to outperform Bitcoin, but when Bitcoin corrects, it also, you know, kind of outpaces to the downside as well as to the upside.

Or at least that's the theory. Problem is, it seems like it's outpacing harder to the downside. So when Bitcoin's heading down, Micro Strategy is going down like while pressing the gas pedal. when Bitcoin's going up, Micro Strategy, it's like, you know, maybe uh we're running out of gas.

We're not hitting that VTEC on that Honda Civic engine, folks.

So, what are we seeing here? What is happening in the crypto market? Well, they diluted their stock even further. And this is one of the heaviest dilutions. Now, what do you mean by dilution?

So, they're spinning up new shares to sell on the market. This increases the amount of Micro Strategy shares and they in fact increased it by $2 billion.

You're going to say, "Well, don't they use that to buy Bitcoin?" Ostensibly, yeah, a lot of the times, but this to me seems like they're going to pay the dividend yields on some of their basically dividend paying instruments, the STRC primarily.

So, they did repurchase some STRC. They spend $136 million repurchasing some STRC and that way they have to pay less dividend payments every single month. So they essentially have sold a lot of these shares.

Every two weeks actually they have to keep paying dividend payments on it. Every month they're basically paying 1%. So it's supposed to pay about a 10% per year. So close enough, you know, with 1% a month.

So every hundred million that they buy back, that's basically one less million dollars they have to pay every single month. And so they're not buying Bitcoin. They're actually buying back their STRC.

And some say the STRC might be the downfall of Micro Strategy. I don't know if I would go that far, but you know, it's just maybe something to think about. Micro Strategy definitely diluting their stocks.