It's Time To Close The 'Long Bitcoin, Short (Micro)Strategy' Trade
Summary
- In October, we recommended a 'long Bitcoin, short MicroStrategy' trade due to MSTR's high NAV premium and reduced borrowing capacity.
- Since then, Bitcoin is up 21%, while MSTR is mostly flat, validating the trade idea.
- That said, MSTR's NAV premium has now shrunk significantly, and the company's recent convertible issuance shows an insatiable appetite for zero cost convertible bonds.
- Thus, it's time to close the trade and move on to greener pastures.
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