MSTR - NASDAQ

Hello, everyone, and good evening. I'm Shirish Jajodia, Corporate Treasurer and Head of Investor Relations at Strategy. I will be your moderator for Strategy's 2025 Fourth Quarter Earnings Webinar. We will start the call with a 60-minute presentation starting with Andrew Kang, followed by Phong Le and then Michael Saylor. This will be followed by a 30-minute interactive Q&A session with four Wall Street equity analysts and four Bitcoin analysts. Before we proceed, I will read the safe harbor statement. Some of the information we provide in this presentation regarding our future expectations, plans and prospects may constitute forward-looking statements. Actual results may differ materially from these forward-looking statements due to various important factors, including fluctuations in the price of Bitcoin. And the risk factors discussed in our current report on Form 8-K filed with the SEC on October 6, 2025, and under the caption Risk Factors in Strategy's quarterly report on Form 10-Q filed with the SEC on November 3, 2025. And the risks described in other filings that Strategy may make with the SEC from time to time. We assume no obligations to update these forward-looking statements, which speak only as of today. With that, I would like to turn the call over to Andrew Kang, the CFO of Strategy.

Thank you, Shirish, and thank you, everyone, for joining our call today. I'll start by touching on a few of our highlights for Q4 as well as for the full year 2025. We closed the year with 713,502 Bitcoin on our balance sheet, which represented approximately 3.4% of all Bitcoin that will ever exist. This reflects continued discipline around Bitcoin accumulation through the fourth quarter and further reinforces our position as the largest corporate holder of Bitcoin in the world. Also during 2025, we successfully raised over $25 billion of total capital, funding growth across our treasury strategy and expanding our product ecosystem. We now have five listed preferred equity securities, which has broadened investor access across yield, duration and risk profiles. Our execution throughout the year puts us in a position to enter 2026 with a stronger balance sheet, more access to liquidity and upside when hopefully Bitcoin price rallies soon. Next slide. 2025 overall was a very important year with several strategic corporate events that I think strengthened our foundation as the world's leading Bitcoin treasury company. We adopted fair value accounting at the beginning of the year, which provided greater investor and market transparency of our Bitcoin holdings, which are now, as you know, marked to market each quarter. Second, Treasury and IRS guidance confirmed that unrealized Bitcoin gains would not be subject to additional corporate alternative minimum tax. We also received the first-ever credit rating for a Bitcoin treasury company, which marked an important step, I think, in institutional recognition and setting the foundation for future progress. And lastly, in Q4, we established a $2.25 billion cash reserve, which provides over 2.5 years of dividend coverage. This is an important enhancement to our overall risk management framework and supports our ability to meet our interest and dividend obligations through market cycles like the one we are seeing today. And lastly, MSCI confirmed that digital asset treasury companies will remain eligible for inclusion in its global market indices, which we believe was the appropriate outcome, and I'll touch a little bit more about that later on in my presentation. Next slide. Thank you. Turning to our Q4 financial results. We reported an operating loss of $17.4 billion and a net loss of $12.6 billion. These results were obviously driven by the quarter-end decline in Bitcoin's fair value under our mark-to-market accounting. Next slide. For the full year, we reported an operating loss of $5.4 billion and a net loss of $4.2 billion. We updated our target range for the full year 2025, precisely because our results are highly dependent on Bitcoin price and can move meaningfully based on market conditions. It's important to call out that our full year results were within our target guidance based on where Bitcoin price ended the year. And while accounting outcomes may fluctuate quarter-to-quarter, our long-term focus remains unchanged. We are committed to increasing Bitcoin per share and building durable shareholder value over the long term. Next slide. Turning to our Bitcoin KPI performance for the full year. At the start of the year, we established clear KPI targets tied to Bitcoin per share growth while recognizing a wide range of possible Bitcoin price outcomes. Under those conditions, we delivered a BTC yield of 22.8% for the year, beating the lower end of our target range, which was set at 22% to 26%. That translated into a total BTC Gain of 101,873 Bitcoin and a BTC dollar gain of $8.9 billion, also beating the lower end of our target range. I think the key takeaway is that even with significant volatility in Bitcoin price, our strategy remained disciplined, and we executed against our KPIs of increasing Bitcoin per share and compounding shareholder value for the long term. Next slide. Since adopting Bitcoin as our treasury asset in 2020, we've consistently added Bitcoin per share each year. 2025 was yet another strong year in this regard and building on the momentum of prior years and demonstrating our ability to add more Bitcoin per share in both good markets and in challenging ones as well. Our focus remains unchanged. As I mentioned before, our goal is to systematically increase Bitcoin per share over time regardless of near-term market cycles and continue to deliver durable BTC value for our long-term investors. Next slide. One more. Thank you. Now turning to the balance sheet. I'll start at the top here. Our digital assets increased from $23.9 billion at the end of 2024 to $58.9 billion at the end of 2025. This was due to a $17.9 billion increase in fair value at the beginning of the year balance as well as the fair value of the Bitcoin we added in 2025. As a result, we ended the year with also $2.3 billion in cash and cash equivalents of which, as I mentioned earlier, $2.25 billion of that represents our USD cash reserve. As of the end of 2025, we now carry also a $1.9 billion deferred tax liability, which just reflects the accounting difference between the market value and the cost basis of our Bitcoin. I'll remind everyone, this is a balance sheet item. It is not a cash tax obligation and it does change quarter-to-quarter with the price of Bitcoin. Moving on -- can you go back, please? In terms of long-term debt, we ended the year at $8.2 billion, which takes into account a new convertible bond as well as an equitization of a prior convert, which we executed both in early 2025. As we said before, we do not plan to issue any new convertible debt in the future, and we'll focus on assessing strategic liability management opportunities to the extent market conditions make sense. And over time, we intend to reduce our leverage to further enhance our credit profile. We also added $6.9 billion of preferred equity, diversifying our capital-raising channels. As a result, total equity, including both preferred and common, rose to $51.1 billion at the end of the year, up from $22.8 billion a year ago. We added $6.9 billion of preferreds through five distinct IPOs as well as subsequent ATM activity, and our common equity increased to $44.2 billion through our ATM. We deployed all of that capital in an accretive manner to acquire more Bitcoin. As I mentioned before, we delivered 22.8% BTC yield and we established the cash reserve. I'd say the year-over-year growth of our capital base strengthens our balance sheet and provides more -- a more durable base to continue raising capital efficiently and acquiring more Bitcoin over the long term. All right. Thanks, Shirish. Next slide. At the end of Q3 -- sorry, at the end of Q4 -- sorry, at the end of Q3, the market value of our Bitcoin position was approximately $73.2 billion, that was based on a Bitcoin price of about $114,000. During Q4, Bitcoin, as we all know, experienced a price decline, which drove the total unrealized fair value loss of $17.4 billion. Look, quarter-to-quarter moves like this can be sharp. It can also be unsettling, but it's important to emphasize that our strategy is built for the long term. It's built to withstand short-term price volatility, even short-term extreme conditions like we're seeing today. And importantly, even in a volatile environment, we continue to execute, we purchased an additional 32,470 Bitcoin in Q4 for approximately $3.1 billion. Next slide. For the full year 2025, the market value of our Bitcoin holdings increased by approximately $17 billion from $41.8 billion at the end of 2024 to $58.9 billion at the end of 2025. And during the year, we added approximately 225,000 Bitcoin. We also recognized an unrealized fair value loss of about $5.4 billion across the year, but we significantly expanded our Bitcoin position, right? We increased our total holdings from 447,000 to 672,500 Bitcoin for the year. Next slide. Our total interest and dividend obligations are now $888 million, which is made up of about $35 million in interest on our converts. That represents an average cost of about 42 basis points. It's also made up of $713 million in dividend obligations from our cumulative preferreds, an additional $140 million related to our noncumulative preferreds. You can see here at the bottom, our cash reserve of $2.25 billion, which was established in Q4, now provides over 2.5 years of interest and dividend coverage, and it's an important and direct benefit to our debt and credit investors. Next slide. And lastly, in October, MSCI opened a public comment period around the proposal that could have excluded companies whose digital asset holdings represented more than 50% of total assets. We felt it was important for us to be a voice on this matter, and we submitted formal written feedback to MSCI. We noted that this threshold would, in our opinion, be discriminatory towards digital assets. It's arbitrary. And in many ways, I think the proposal was unworkable, and that it rested on a mischaracterization of strategy. As a result, MSCI determined not to implement their initial proposal. And as a result, we have not been excluded from MSCI's indices. I'd note Strategy is an operating company. We have 30-plus years of history in software and tech. We have 1,500 employees. Last year, in 2025, we generated $477 million in annual revenue. And while our Bitcoin holdings has grown significantly from a balance sheet perspective, we are an operating company with a treasury balance sheet built upon a commodity. And lastly, look, on a final note, I just want to say thank you. We appreciate the strong support we received from both active and passive retail and institutional investors, regulators and policymakers all in support of our efforts on index inclusion. We thank you for that. I think there's still some more work to be done, and we look forward to working with the industry in the coming year on that as well. So with that, I will turn over to Phong, our CEO. Thank you.

Thanks, Andrew. First, just want to acknowledge. I understand the market conditions for today's call is challenging. And the fact that we have thousands of people watching this, as a testament to your intellect, your curiosity and for many of you, your conviction. So thanks, everyone, for joining us today. I also want to share, look, some of you bought Bitcoin or MSTR in the last year. This is your first downturn. My advice is to hold on. Remember the fundamentals that cause you to buy Bitcoin. It's because Bitcoin is the digital transformation of capital or maybe it's because it's the hardest and most ethical form of money or because you believe in a non-sovereign censor-resistant store of value. None of these fundamentals have changed. They didn't change in the last year. They haven't changed in the last 18 years. For the MicroStrategy shareholders and the Strategy shareholders now, remember the fundamentals of why you bought into MSTR common, because we are levered and amplified Bitcoin, we're built to outperform Bitcoin over the long run. It could be because you see us as digital innovators. We invented the enterprise business intelligence software space in the 1990s, and we invented digital treasury companies in 2020. Or it's because you believe in the management team that's here today. None of that's changed in the last year. And for those of you who have been with us on this journey since 2020, you've seen other periods of Bitcoin and MSTR downturns, and you held on and you were rewarded for your conviction. So thank you. And perhaps I ask that you share your wisdom and your confidence with those who are newer to the community. X is a great place to do this, in person is a great place to do this, and a great opportunity to get together in person. Next slide, please. It is Bitcoin for Corporations. We will have our sixth annual Bitcoin for Corporations in Las Vegas in 3 weeks, February 23 through 26. I'd love to see you there. It's a great place to get together and learn about Bitcoin, Bitcoin treasury companies, digital credit, digital capital and digital money. It's also a great place to see our software business in action. And as Andrew mentioned, our software business constitutes 1,500 employees and over 3,000 customers, and they'll be there, showcasing the transformation of intelligence and the intersection of AI and BI. And I would like to note, we had a great year last year in our software business. We saw a big cloud transition as our revenue went from decline to increase of 3%, and our cloud revenue went up 65% year-over-year. So I invite you all to join us in Las Vegas, February 23 through 26. Next slide. Take a step back, this is our business. We have been buying and holding Bitcoin since the third quarter of 2020, every single quarter. We now have 713,502 Bitcoin with a total acquisition cost of $54 billion and a $76,000 average Bitcoin purchase price. Recognizing now that Bitcoin is below the average Bitcoin price, you might ask the question, what does that mean? it really doesn't mean anything, right? It doesn't mean that we have any issues servicing our debt or paying the dividends on our preferreds. We don't have any covenants or triggers that say when Bitcoin price goes below our average Bitcoin purchase price, that anything has to occur other than we continue with our strategy. Next slide. 2025, as Andrew mentioned, was a pretty big year for us in the capital markets. As you see here, in 2024, we raised $22.6 billion, and we actually outstripped that number in 2025. The big change last year was we moved from convertible debt, $6.2 billion in '24 and $2 billion in '25, to $7 billion of preferred. We invented digital credit, and we invented the preferred market, which now other Bitcoin treasury companies are moving into, issuing perpetual preferreds. We're pretty excited about this. You'll see here, we had five IPOs. The other thing I'll note here is that year-to-date 2026 in the face of a tougher Bitcoin market, we were able to, in 1 month, raise an additional $3.9 billion of capital. And for the most part, buy Bitcoin with that. Next slide. So what do those big numbers mean? How do you think about that? In 2024, we were the largest U.S. issuer of equity in the entire country. Last year, 2025, we were once again the largest issuer of equity. We were 8% of the entire equity capital markets, 6% to the common equity market and 33% of the preferred equity market. We are getting people to invest in our company through equity raises and preferred raises, and turn that into Bitcoin, Bitcoin per share and Bitcoin yield to our shareholders. And we're doing it with the intersection of traditional finance with some of the largest banking partners in the world. Morgan Stanley, Barclays, Moelis, TD, Benchmark, Clear Street have all been participants in these markets. And they give us distribution out to wealth management and to retail and to institutions. So we've been very successful in the last year with continuing our strategy. Next slide. You'll see here in addition to getting folks to participate in our equity raises in our equity capital markets. We continue to add more and more research analysts. Here you can see price targets, and you can see they all have buy ratings on Strategy. Next slide. So let me talk about digital credit and what are we doing in digital credit and why digital credit is important. Next slide. First, I mentioned 2025 marked the launch of digital credit, and we launched five different instruments. We started with Strike, which is convertible digital credit. And it was really a gateway from convertible debt, which we no longer are issuing, to a convertible preferred note. We then launched Strife, which was our most senior of our instruments, our first fixed perpetual digital credit instrument. And after that, we launched our most junior one, Stride. And as you can see, the size gets bigger and bigger with each one. And then we launched the most important, which was Stretch, which is $2.5 billion in our first digital credit instrument. And then in November, we went to the euro market and launched Stream, which is USD 717 million. And the importance of this is accessing a European market and those who want euro exposure. Our plan with Stream is to, over time, up-list it into a regulated retail accessible market, and we're excited to do that over the course of this year. Next slide. Here's the overview of digital credit. I think the most notable here is to look at, as an example, the liquidity that we're experiencing in Stretch, $118 million traded a day over the last 30 days. As a comparison, typical U.S.-based preferreds trade $1 million a day. So these are very liquid and very interesting instruments, the dividend at 11.25% and on a tax equivalent basis 18%. And you also see the volatility here at 7%. So it's an instrument where we've been able to start to target a very finite price close to $100 and drive that volatility down to 7%. Let's go to the next slide. So what is 2025, the third quarter and the rest of 2026 has been about? It's really been about seasoning our digital credit. And by seasoning, I mean, maturing in the market and making the instrument more creditworthy. So after we launched Stretch on July 25, there were a couple of actions we took that made the credit more creditworthy and a better investment. First, and Andrew mentioned it, the CAMT guidance was a big deal. This is a big change by Treasury and IRS, acknowledging the importance of the digital asset ecosystem and that there should be no unrealized capital gains, taxes on Bitcoin, period. The second thing is we got an S&P rating, a B- issuer credit rating, which is a starting point for us to be able to access different types of investors in the credit market. November 4, we got to what really was our target, was to get Stretch to trade at par, $100 for the first time. $100 is important because it decreases the volatility of the instrument. It shows that we're able to do something that no other preferred instrument has done in its past, which is to target a specific price, and it allows us to raise more via our ATM. And then we added our U.S. dollar reserve. At the same time, since we launched Stretch, we have added 105,732 Bitcoin to our balance sheet. That's about 16% more. These are all actions we took to make our digital credit stronger over time. Next slide. So what is Stretch, right? Why are we so enamored and excited about Stretch? Why did I say 2026 is the coming out party for Stretch. Stretch is one of the most attractive instruments and securities in the market today. It pays an 11% effective yield, 18% on a tax equivalent basis. We paid monthly dividends on time, on schedule. And we have said that we expect the return of capital treatment for the next 10 years. We'll run our business to be able to give everybody tax-deferred earnings for the next 10 years. We're targeting $100 price. The volatility is 7%, its actually decreased recently to 6%, and we have mechanisms above and below that price to keep the price stable. It's quite a bit of a feat of financial engineering. And it's extremely over-collateralized after you take out all instruments that are senior to Stretch, we still have 5.6x collateral over Stretch. And so it's an over-collateralized instrument. And then after that, we've added $2.25 billion of U.S. dollar reserves. So we have 2 to 3 years of dividend coverage. And I mentioned the liquidity of Stretch is trading extremely well. Its Nasdaq-listed and it has a 4-letter ticker, is easily accessible to folks. Its now accessible on Robinhood and Square Cash App and pretty much anywhere else that you can buy a security. Next slide. So let's talk about our balance sheet. I've seen a lot of questions. We get them from investors, we get them from shareholders, we get them from people on X. What's going on with Strategy's balance sheet? Are you worried that when Bitcoin price drops, that you are going to have issues with your convertible bonds? Are you going to have issues paying your dividends? Are you going to have to sell Bitcoin? The short answer is I'm not worried, we're not worried and no, we're not having issues. What's the reason? One, we have a BTC reserve at $60 billion. This was as of last Friday, now it's $45 billion. And our equity or enterprise value still trades above our Bitcoin reserve. Our convertible debt, that's the notes that come due or preferred equity doesn't come due, is at about 10% leverage. With the latest Bitcoin price as of today, we still have about 13% leverage. So the $8.2 billion that come due is 13% leverage. How do you think about 13% leverage? Those who do not spend a lot of time in the debt world, you might say, well, 13% sounds like a lot. Let me show you how we compare 13% to the S&P 500 universe. Next slide. First thing is when you take your leverage, you take out the cash that we have. So our net debt is $6 billion. As I mentioned, our net leverage is 10% and it's 13% with the most recent Bitcoin price. If you look on the bottom left-hand side, this is how we compare to the S&P 500 universe, right? We have 10%, currently 13%, leverage. If you're AAA-rated, right, investment-grade company, your bonds are trading as AAA rated, you have 23% leverage. If you're BBB rated, high yield, you have 32% leverage. We have half the leverage of an investment-grade company, 1/3 of the leverage of a high-yield company. How about looking at it by sector, Strategy at 13%, it looks like a tech company, which is low capital, low assets, high income, right? They're levered at about 15.7%. You compare us to asset heavy, high debt companies and industries, utilities or real estate, they're levered at 42% to 48%. We are not a highly-levered company. Next slide. What about our convertible debt, right? Not very highly levered, so that's good, but what happens when our convertible debt comes due over the next 5 or 6 years, are we worried that we're not going to be able to pay back our convertibles. No, not really. You'll see here the net debt of $6 billion compared to a Bitcoin reserve of $59 billion, now $45 billion. In the extreme downside, if we were to have a 90% decline in Bitcoin price, and the price was $8,000, right, which I still think is pretty hard to imagine, that is the point at which our Bitcoin reserve equals our net debt, and we will not be able to then pay off our convertibles using our Bitcoin reserve, and we either look at restructuring, issuing additional equity, issuing additional debt. And let me remind you, this is over the course of the next 5 years, right? So I'm not really worried at this point in time, even with Bitcoin drops that we're not going to be able to service our convertible debt. All that said, it's staggered over time. We have put dates between 2027 and 2032, and our plan is to equitize that over time. And if we're not able to equitize it, we'll find different ways to restructure the debt. Next slide. Of course, we have this Bitcoin reserve. And what does it really do for us? It creates long-term durability. That's why we've been building it up. That's why we've added about 16% over the last 9 months to our Bitcoin reserve. It gives us long-term durability to issue more credit ultimately. And as we issue more credit, the dividends will rise. Our dividends, as Andrew explained, $888 million, we have 67 years of dividend coverage with our Bitcoin reserve. If Bitcoin goes up 1.5% a year, that's our breakeven ARR, we could just sell the incremental Bitcoin that we get, not that that's what we'll do, to pay our dividends. So we don't need a large increase in Bitcoin price to be able to service our dividends, primarily through Stretch. Next slide. Our U.S. dollar reserve, which I'm very happy we put in place in Q4 and solidified in Q1, is $2.25 billion. That's 30 months of dividend coverage, 2.5 years of dividend coverage. So if we were not able to raise capital, which we've shown that we've been able to do through equity issuances, we could sit here and do nothing and pay off our dividends over the -- or satisfy our dividends over 30 months using this reserve. Next slide. And as I mentioned, since we took -- since we received a B- stable outlook credit rating from S&P, we've taken a lot of positive actions to improve this, right? Will the S&P increase it from B-? I think if they were to make an evaluation today, they likely would, but they usually make valuations every year or so. They don't want to move fast in terms of what the credit rating is. But we've added a U.S. dollar reserve, $2.25 billion. I'll remind you that the first $1.44 billion, we raised in 8 days. The second is we've been able to maintain a robust access to capital. We raised $9.5 billion in 3 months and 72,300 Bitcoin. So we've shown that we're highly liquid and able to access capital. And we paid dividends every single month, every single quarter since our credit rating. Next slide. So what are we going to do to make Stretch even better? In addition to improving the credit quality, we've been working with brokerages like Robinhood and Cash App to get Stretch and preferreds listed there. Robinhood, in fact, launched the first-ever preferreds on their platform because of the demand and the liquidity that they saw in Stretch. We've been working with wirehouses, wealth management and broker-dealers, RIAs to help explain Stretch. We've integrated Stretch now into crypto. So just like you saw MSTR turn into MSTY, MSPU et cetera, we're seeing Buck and other coins like Saturn, APYX, A-P-Y-X and TradFi platform starting to launch products on top of Stretch. And we expect, over time, Stretch will be tokenized. We'll integrate with ETFs also, right. We started, we've been involved in industry conference, leveraged finance conferences, teach-in sessions, and so we're telling everybody about Stretch. And we engaged in digital marketing, you might have seen ads on X or YouTube or Wall Street Journal. And of course, we have strategy.com Strategy app, interviews and podcasts. We want everyone to be aware of digital credit because we think it's an amazing product for an end investor, and we think it helps build the Strategy flywheel and the Bitcoin flywheel over time. Next slide. I do want to update a slight change to our Stretch guidance. In the past, we've said that we're going to base our actions on Stretch on a 5-day VWAP at the end of the month. What we found is that Stretch trades very interestingly around dates like our record day and our payment date. Our record date falls before the 5 days at the end of the month, and that's where we've seen people try to buy Stretch, so beginning before the record date. So we thought the better view of Stretch price is to look over the course of the entire month. So the VWAP range by which we'll look at the price of Stretch and make determinations on what to do with our rate will be based on the entire month. So as an example, for January, if we were to have made that change in January, it would have been January 1 through January 31. For February, it'll be February 1 through February 28. Next slide. So we talked about digital credit and the importance of digital credit is what it does for a digital equity. Digital credit amplifies our common equity. And I just looked at -- these numbers were as of last Friday. As of today, MSTR is up 48% since we started this strategy, Bitcoin is up 36% since we started this strategy, and we've outperformed the Mag 7, gold, S&P 500. We amplified Bitcoin, designed to outperform Bitcoin, and our belief is that Bitcoin will outperform every other asset class in the world over time. Next slide. How do we create amplified Bitcoin? How do we outperform Bitcoin? We produce Bitcoin per share. We increase Bitcoin per share, which is -- the change of Bitcoin per share is Bitcoin yield. And you look here over the course of the last 6 years, we've increased Bitcoin per share every single year. That's why we outperform Bitcoin. If you buy 1 Bitcoin at the beginning of the year, you'll have 1 Bitcoin at the end of the year. If you buy 1 share of Strategy at the beginning of the year, 2025, you would have had 23% more Bitcoin at the end of the year 2025. We increase Bitcoin per share, and we call that increased Bitcoin yield. Next slide. So how do we think about this over the course of the next 7 years? I showed you what we've done in the last 6 years. The way we're going to increase Bitcoin per share over the course of the next 6, 7 years is we are going to sell digital credit. And what does digital credit do? By selling digital credit, we generate amplification. By generating amplification, we increase Bitcoin per share. By increasing Bitcoin per share, MSTR common outperforms Bitcoin. It's a very simple formula. And what are the inputs? How much digital credit can we sell, which is how much Stretch can we sell? Here is an assumption that on a base of $60 billion at Bitcoin, if we can sell 10% of digital credit, which is $6 billion, this is what this might look like over time. And you say $6 billion, is that a lot? Or is that a little? Well, last year, we sold $7 billion of digital credit. And we raised over $25 billion in the equity capital markets. So we think this is a fairly conservative assumption, $6 billion. This assumes a 10% dividend rate, which is where we are right now, and that we're issuing equity to pay for the dividend on digital credit at 1.34x mNAV. And so I'll call this a low scenario. If we have this low scenario over the course of 7 years, we'll increase Bitcoin per share 1.4x. That's a 5% annual Bitcoin yield. Next slide. What if we can do a little bit better? What if we can assume 16% of digital credit sales, so not $6 billion, but $10 billion. What if the Fed lowers interest rates or we're able to lower interest rates on our digital credit down to 9%? And what if the view of this causes investors to believe we'll increase Bitcoin per share and our mNAV goes up and we have amplified Bitcoin and MSTR. And we're able to get to 1.75x mNAV. This scenario with the assumption of 30% Bitcoin ARR gets us to a 2x increase in Bitcoin per share over 7 years, which is a 10% annual BTC yield. Next slide. What does a more aggressive scenario look like? Maybe we can assume 20% digital credit sales, we were able to drive the dividend rate down to 8%, and our mNAV goes up to 2.25x, then we can increase Bitcoin per share 2.5x over 7 years and a 14% annual Bitcoin yield. That's another scenario. And I'll go to the final slide of my section. Ultimately, this is the strategy of the company. We're going to issue digital credit through Stretch. We're going to amplify the common equity because of it. It increases our Bitcoin per share, and we outperform Bitcoin. What are the levers that we can play with? How much digital credit can we sell? How attractive can we make Stretch? How well do we market it? How well do we distribute it? With higher demand, we can lower the cost of credit, and we'll increase the mNAV. That's the thesis for the company, and that's what we're excited to do and that's what we're going to focus on in 2026. So with that, I will pass it over to Michael.

Thank you, Phong. I'm delighted to have you join us today. Why don't we go to the next slide? All of our strategy is based upon looking at the fundamentals and taking a 10-year view. And so when you consider the fundamentals of digital capital, you have to start with the most important regulator in the entire world. And that is the President of the United States. We have a Bitcoin President, and he's intent upon making America the Bitcoin superpower, the crypto capital of the world and the leader in digital assets. I don't think you can underestimate the importance of having support for the industry and digital capital at the very top of the political structure. Now equally important, if we look at the cabinet that's been put in place on the next slide, you see the entire government has now embraced Bitcoin. When I say embraced Bitcoin, what I mean is 18 months ago, there was one person in the government that had an awareness of it and was skeptical to neutral or grudgingly accepting of it. And everyone else in government was either negatively inclined or they were ignorant of it. And now there are 12 individuals I'd want to highlight here. J.D. Vance, the Vice President; Scott Bessent, the Treasury Secretary; Paul Atkins, the Head of the SEC; #4, Kevin Warsh, who is just -- who is the Fed Chair Nominee, who is -- who understands digital assets, understands the use case of Bitcoin. This is a tremendous move forward for us, a big fundamental shift that now you can look at the Head of the SEC, the Head of the Treasury and the Head of the Fed as all-appreciating the pivotal role of digital assets and the growth of the country. And the economy, and if you go to the second line, right, you see the Head of Intelligence, the Head of the Small Business Administration, the Head of Federal Housing, the Head of Health and Human Services. All Bitcoin believers. And then Michael Selig, the CFTC Chairman; David Sacks, who's doing a wonderful job; Howard Lutnick, Commerce Secretary and even Kash Patel. So if you consider that, we went from one neutral to a Bitcoin President and 12 positive, constructive. These are great fundamentals for us, and I don't think we can lose sight of this, because everything that follows in the marketplace is very much influenced by the political structure of the world. On the next slide. Capitol Hill has embraced Bitcoin. We've got bipartisan consensus that the United States should embrace digital assets, should embrace digital capital, should be a leader. That is not a debate. No one is saying that there's one party in favor of digital capital, another party against it. That's a big deal. So although the political process is complicated, the fact that we have moved from an asset which was a scary speculative thing and maybe a legitimate to a legitimate asset that most reasoned politicians and regulators and policymakers believe they need to move constructively forward with. Let's go to the next slide. Big banks are embracing Bitcoin. Roll the clock back 18 months, and this Harvey Ball diagram is pretty much blank, mostly blank. And so when you actually look at the top financial institutions and you ask the question, do they allow IBIT trading? Well, there's an avalanche of support there. That's flipped in 12 months. The second question is do they offer credit against IBIT? That's a big deal. 12 months ago, it was almost impossible to get a loan or a margin loan against IBIT. Now there are many banks coming in the space. Would they let you trade BTC? Now you have banks that are announcing support for that. You have banks announcing support to custody BTC and you have banks announcing intent to offer credit against BTC. Again, this is an extraordinary sea change. We cannot underestimate the value. I think that the fundamentals of the industry are driven by the banks creating credit. One bank can create as much credit as all the Bitcoin miners can create in Bitcoin in a year. So each bank that turns on Bitcoin-backed credit lines might be the equivalent of another halving for the network. Let's go to the next slide. TradFi and fintech have embraced Bitcoin. If you look at the number of accounts of BTC trading asset, there's a pretty clear bullish trend here both across crypto-native exchanges, fintechs and neobanks and the brokerages and banks in the wealth management channel. Those are large numbers. Fundamentally, we're going from an asset class that no one could buy if they wanted to, to an asset class where everyone is competing to facilitate access and exposure. The next slide. This is the ETF trend. ETFs are embracing Bitcoin. 125 ETFs -- or ETPs launched, 1.4 million Bitcoin held in them. A very consistent trend, up and to the right. Next. And this is the corporate trend. It was nothing in 2019. We were the first serious player. We were lonely for a bit and we went to 33, then we were 64 in 2024, and now we're 194. This is clearly explosive growth, and there's a signal here. Next. The public markets are embracing Bitcoin. Look at these IPOs that have taken place this year. Bullish, Circle, Gemini, BitGo, Kraken that's coming. And then Coinbase, Block and Robinhood have all been included in the S&P 500. So I see this as a very bullish indicator and a fundamental improvement in the structure of the industry. The concern du jour is quantum computers. And many people ask, do quantum computers represent a threat to Bitcoin? I would note the quantum computing concern and quantum FUD is just the latest in a long litany and a parade of horrible FUD that has been taken by since the beginning of Bitcoin. There was functionality FUD. Bitcoin is not functional enough, so it will fail, it needs smart contracts. And then people thought it was a ponzi. And then they thought it was too volatile. And then they thought , well, there is a bug in it and maybe it will be 51% attack. Maybe the Chinese control too much of it. And then there was -- the Chinese shut it down. It was the opposite of the China FUD. It was the China non-embrace. And then we had all manner of block size wars and bandwidths FUD and there was it uses electricity FUD and then there was a wealth concentration FUD and of course, then there was another crypto will be better. What I would say is whenever dealing with each of these concerns, we have to take them seriously. We have to consider them, but we have to remember two things. One, the two words on the back of the Hitchhiker's Guide to the Galaxy. Don't panic. Most important, two words, more important than everything and the encyclopedia or the Hitchhiker's Guide to the Galaxy. The second observation, the Hippocratic Oath, do no harm. And so whenever you're faced with a challenge in any system or any network, you have to make sure you don't panic, you're not railroaded into doing something foolish or destructive. And you also can't do something that causes harm. You don't want an iatrogenic intervention where the care is worse than the disease. So our position on quantum computing: one, we think it's probably 10 or more years away before there's a threat. That is the consensus. It's a promising technology, but it's still nascent. Many industries, including finance and defense are dependent upon traditional cryptography. They face the same risks. There's a significant global investment going into building quantum-resistant protocols not just in the Bitcoin community, across all communities. The Bitcoin community in specific is engaged on research and development in these efforts. There's good work that's taking place. If Bitcoin requires an upgrade, there will be global consensus. Right now, there isn't a global consensus that existing cryptographic libraries are at risk. And to stampede into a hypothetical fix before there is consensus would introduce new attack surfaces and new complexity and new failure modes that don't currently exist. It's very similar to over-vaccinating and it's like, well, there's a 0.001% chance that the kid might get a disease. So we're going to vaccinate them just in case, but of course, 3% of the people that get the vaccine have side effects, right? And so it's very important that we don't over-insure over-vaccinate, overtreat, over-worry. A famous President of the United States, he said, "if you see 10 problems driving down the road, 9 of them will probably drive themselves into a ditch before they get to you." So the one thing you can't do is you can't buy 100 expensive insurance policies that cost collectively 100% of all your operating income to insure against something which is 2% likely to happen. That's why you have to be very thoughtful about addressing these risks. And you have to address them at the right time, not too soon, not too late. But -- because too soon, you probably don't have the right technology and you're over-insuring. Too late, right, you accept the risk that you shouldn't. That's why consensus is very important. Bitcoin will be stronger if and when that quantum upgrade takes place, right? And so Bitcoin is upgradable, and Bitcoin can be upgraded to be stronger, and we, of course, are optimists. And we believe that the human race will accept challenges and will upgrade to meet those challenges and do it in a rational fashion. And Bitcoin has a history of meeting challenges in a rational fashion such that it is stronger, and you can see all those examples. Last, but probably most important on this slide, Strategy, we are going to initiate a Bitcoin security program that coordinates with the global cybersecurity community, the global crypto security community and the global Bitcoin security committee, in order to help and contribute to consensus and solutions to address the quantum computing threat as well as any other emerging security threats that evolve. We think it's reasonable and appropriate for us to do this, given our large responsibility as a Bitcoin holder but we want to do it in a very responsible fashion. And we want to make sure that we coordinate with the global cyber, crypto and Bitcoin security community because there are a lot of very, very brilliant minds here. There's a lot of good work being done. And it's likely that consensus will form and solutions will form at the right time in a responsible fashion. So that's our view on quantum. Next slide. Digital credit. Our company exists to -- we structure and we secure Bitcoin, right? We're a digital credit issuer. If you look at this chart, what you can see is that the native volatility or the natural volatility of Bitcoin is about 45%. For a 45%-vol asset to draw down 45% shouldn't shock anybody, right? I note the Bitcoin looks like it's drawn down about 45% since it's all-time high 4 months ago. So a 45% drawdown on a 45%-vol asset is probably to be expected, just like an 80% drawdown when it was an 80%-vol asset. On the other hand, what you can see pretty clearly is that Strategy has stripped that volatility off of BTC with Strike, which was 32%; Stride 27%; Strife 24%; and Stretch down to 7%. So we are stripping the volatility off of Bitcoin, and there is conservation of energy and conservation of volatility. And so the volatility that we stripped off of the credit instruments accrues to the common equity. And so that's why MSTR is 63% vol. But it's not really complicated piece of engineering. It is just -- it is very pure financial engineering. There's a group of people that want low-vol, principal-protected instruments that are credit instruments, and there are other people that want high vol, high performance. Next slide. Right, think of us as a digital credit vehicle. Our job -- we are thrusting forward. We are actually moving through space through issuing digital credit, right? It's -- digital credit is the product. Bitcoin is the backing collateral. The secret or the most important thing for us to do is to build the vehicle in the most robust, fault-tolerant way that we can, the most scalable way we can. You could think of it as a Bitcoin battery and then a U.S. dollar battery. And we have lots of options. We have options to run on the U.S. dollar reserve. We have the option to sell equity. We have the option to sell Bitcoin. We have the option to sell Bitcoin derivatives. And we keep our options open so that we can do the best thing for all of our stakeholders. Our common stock shareholders. We want to do the right thing for the MSTR common stock shareholders. We want to do the right thing for the credit holders of the digital credit instruments. And we want to do the right thing for the Bitcoin community. And we believe that if we're rational and thoughtful then we get a good outcome, which is BTC positive, MSTR positive, STRC positive. Next slide. Companies exist to convert capital into cash flows. In essence, you have capital investors and you have credit investors. The credit investor wants $10,000 a month forever. And the capital investor gets $1 million of real estate with no cash flows for the next 30 years. And maybe they'll get more than 10% a year. Maybe they'll get 20%, 30% a year performance. But it's pretty straightforward that the world's built on capital. The world runs on credit. BTC is digital capital. STRC is digital credit. We -- it takes an operating company to transform capital into credit. If we were a real estate development company, we could take $50 billion of capital, buy a bunch of land in New York City, build a bunch of buildings, market the buildings, rent the buildings and generate cash flows. That's a way to do this, but you take on all sorts of liability, all sorts of counterparty risk, operating risk, it takes a lot of time. You have property taxes, employment taxes, income taxes, usage taxes, et cetera. That's the 20th century way to actually create credit from capital. We've taken a much faster route, we would just take the money, buy Bitcoin and just issue the credit, and we skip all the intermediate steps. That makes us extremely technically efficient, it makes us extremely economically efficient, it makes us extremely tax efficient. Next slide. At the core, what are we doing, right? we're transforming that capital into credit. We're taking BTC and we're converting it into a currency, whether it's a U.S. dollar or a euro. We're stripping the risk by over-collateralizing it, right? If you have $5 of Bitcoin, right, and it falls by 80%, then you've got $1 of Bitcoin. But when you have $1 of STRC backed by $5 of Bitcoin and it falls by 80%, you still got $1 of STRC backed by $1 of Bitcoin. So we're stripping or reducing the risk by the BTC rating. And then we're also taking other actions to reduce risk, right? We're an operating company. We can raise capital. We can sell equity. We can refinance. We can strip risk by taking a 2-year obligation or a 10-year obligation and stretching it out to a 20-year obligation. So operating companies can do these things. We're also dampening the volatility. We damped the volatility by building the collateral, by building the U.S. dollar value, by adjusting the dividends, by adjusting the ATM programs, by adjusting our capital markets behavior. And we adjust these things minutely every minute, maybe even every second, right? We have programs to adjust all of our activity so as to damp volatility, and we're very engaged and we are very focused on it. Of course, and then we distill the yield from the capital asset in order to create a fixed income yield rate. And of course, we're compressing the duration. Instead of telling you to wait 10 years in order to get a 30% return, we're giving the 18-year-old cash flow this month and every month. So 10 years of duration is 120 months. We're converting 120 months into 1-month duration. And so when people say, what does the company do? The company transforms digital capital into digital credit. Are these things valuable? Of course, they're valuable. There's a $300 trillion market for credit. It's extraordinarily valuable. And the key is for us to create the best credit in the world. And to create the best credit you can using digital capital. Let's go to the next slide. How do we benchmark ourselves against the other credit alternatives? Well, the bank accounts might give you 40 basis points. The money markets are giving you 360 basis points taxable. Insurance companies don't pay tax and endowments don't pay tax, but actual real people, families do, private companies do, public companies pay tax, the world's full of people that have to pay tax. And so 360 basis points of money markets works out to -- might be only 180 basis points if you live in New York or California after tax. So clearly, what we have here is a yield-starved environment. The base rate and the risk-free rate is 360 basis points taxable, and that means that all the conventional credit instruments are pegged to that, like mortgage-backed securities, investment-grade bonds, junk bonds. They all trade at very small premiums or spreads over that risk-free rate. And STRC is paying 11.3% at par -- 11.25% at par. And so you can see here that it's 3x more on a pretax basis, but on a tax equivalent basis, it's like a bank account in Miami that pays you 18%. It would be much more. It would be like a bank account that pays you 22% or 23% in New York City or San Francisco. So we think we've been able to create a very compelling credit instrument versus other credit instruments. It's just 2 to 4x better. And let's go to the next slide. We don't just benchmark ourselves against other credit instruments. We also benchmark ourselves against all the other non-U.S. dollar currencies. And what you can see here is the U.S. dollar has got a 370 basis point risk-free rate, but the Korean won, the Canadian currency, the euro, Singapore dollars, Japanese yen, Swiss francs, they're much weaker. And so fundamentally, you can think of the Stretch rate as the risk-free rate in the Bitcoin ecosystem. It's like the Bitcoin rate, short end of the yield curve. So we are working to define the yield curve, like what -- if you're willing to accept no guarantee of yield and 10-year duration, then you get the Bitcoin rate, which is right now 35%, 40%. We expect that going to be 30% over time. But if you want to go to the short end of the yield curve to the 1 month and then 11.3%, right, is the rate. We think that this is -- creates just a very compelling opportunity. Clearly, we believe the killer app of digital capital is digital credit. And oftentimes people joke, it takes 100 hours to understand Bitcoin, maybe it takes 1,000 hours to become a Bitcoin maximalist. It only takes 10 seconds to understand Stretch. Stretch is 11.25% dividend yield paid monthly. That's it, right? It's a 10-second idea. Let's go to the next slide. Okay. Here's an actual 4-month snapshot. And this is an interesting comparison, Stretch versus Bitcoin. What's the difference between credit and capital? Well, in the last 4 months, Bitcoin has traded down 30% through the first of February, Stretch is up 1%. And so it doesn't take a rocket scientist to look at this chart. If you're a retiree, if you're a corporate treasurer, if you're a fixed income investor, if you're any kind of investor and you look at these two charts -- if your crypto curious or you think you might like Bitcoin, you look at this and you think, "well, I like it, I just can't stand the ball." And you could see why. Do you want 30% drawdown and no dividends? Or do you want a 1% price appreciation and 5.3% paid dividends with an ongoing 11.25% dividend rate. And with the company that's making a commitment to stabilize that price, to target $100 and do whatever it takes, including raise the dividend. So we believe that what we're doing is expanding the market. We're bringing new capital with new forms of investors into the digital asset space. And we're making -- we're creating sort of a gateway product or an on-ramp to digital assets and digital capital by way of STRC. And of course, we're still very early on. This is like the first 5 months of seasoning of STRC. We think that after 12 months, we'll have a better picture. And clearly, in some cases, with credit instruments, people have to see it for 2, 3, 4 years before they actually want to buy it. So we think that STRC is going to continue to season, continue to harden, continue to stabilize, continue to build AUM, build liquidity, and we will continue to make progress on volatility over the coming 2, 3, 4 years. So it's a very straightforward exercise on our part. This is the flagship product of the company, right? At this point, everything we're doing in the capital structure is to improve the liquidity, decrease the volatility, increase the AUM, increase the creditworthiness, decrease the risk and improve the standing of Stretch, right? And you can extrapolate what that might mean with everything else that we do going forward. Let's go to the next slide. There's a picture of that volatility, right? We started with a higher vol. We're working it down. We do things like create the USD reserve. We adjust the dividend rate. We do no harm. We don't sell it if it's not at our target. I mean, all of these things are active decisions every day, every minute of the day. Next. And we're pleased that we are building the AUM. It is scaling. And it's not going to be a straight line up and to the right. We're going to have good months. We're going to have great weeks. We're going to have bad weeks. We're going to have bad months. That's okay. We're in this for the long term. By the way, the long term means 4 years is the short number, 10 years is the target number, 7 years is the middle, right. So as Phong pointed out, we're looking out 7 years thinking, well, we can -- if we do what we're doing, we can double Bitcoin per share over 7 years, if we execute well. And then we're looking at this over that 7-year time frame and thinking about how we actually make this into a truly great -- the greatest credit instrument in the world. Next slide. Phong had alluded to the fact that it's much more liquid. I think Stretch traded something like nearly $300 million today, a huge number, right? And it's trading consistently above $100 million. That's unheard of. A lot of people list -- perhaps over the counter, they trade $100,000 a day. And then they -- publicly listed, they trade $1 million a day. So these things in the first 12 months are already off the charts by a factor of 100 more. And Phong noted, but we didn't dwell on it. We were 33% of the preferred stock issuance last year, right? We are transforming the preferred equity markets. We're digitally transforming them. We're -- just like we revolutionized and shook up the convertible bond market until we were the largest convertible bond issuer, we're now shaking up the preferred equity market and becoming the largest preferred equity issuer. And it's because we're putting an innovative asset together with an innovative security together with innovative business strategy and the way we manage our ATMs, the way we manage our company. Next. This is a chart we're very proud of. Even though Bitcoin has struggled, if you look at the Bitcoin price, we've been increasing the BTC rating of Stretch even as the Bitcoin price has been falling, right? So we're increasing the collateralization of this. We're decreasing the risk of this. And we're doing it through programmatic, thoughtful risk management on our balance sheet. Next slide. Bitcoin is a 43% ARR, 45% vol asset. Digital credit, Stretch is 11.25%, 7% vol. It might jump up to 10% vol sometimes. Maybe we get it down to 5% vol, 4% vol, 3% vol, 2% vol. I don't know where we'll get it, but it seems like it's going to be single digits. And then the third layer is digital money. Our view for that is less than 1% vol, 0 vol digital money. Can we actually create something that pays 6% to 8% that's got 0 vol. We can't do it ourselves. We won't do it, but we welcome partnerships with other companies. With ETFs, with TradFi projects, with banks, with crypto token projects. I mean a lot of other people can use Stretch and they can step it down. They can make it 80% Stretch, 20% cash. People are going to step Stretch down. They're going to lever it down. They're going to lever it up. They're going to mix it. They're going to manage -- they're going to actively put in management and volatility buffers and liquidity buffers, and put it in various regulatory containers. Next slide. Right, you can deliver digital money as coin, like a savings coin; you can deliver it as a fund, a private fund or a public fund, an ETF or you can deliver it as an account on a crypto exchange or a bank. We welcome all those partnerships. Our view with Stretch is, we're going to market it to the general public. We're going to market it to credit investors. We're going to market it to enterprises. We're going to market it to corporate treasurers and corporate CFOs, right? We're going to offer you 2 to 4x more than your existing treasury strategy. And we're going to also work these OEM relationships in order to build great partnerships so people can create insanely good digital money products based on our digital credit. Next slide. Quick review of illustrative models. We're looking out 7 years. And so one model is we target 5% BTC yield and we increase Bitcoin per share by 1.4x over the 7 years. The mid case is we target 10% BTC yield. Let's go to that slide. Yes, 10% BTC yield. In that case, we will double Bitcoin per share over 7 years. And the high end would be a higher yield and we -- 2.5x Bitcoin per share. What is our objective? Our objective is to double your Bitcoin per share, right, over 7 years, right? I mean, I would be disappointed if we don't double Bitcoin per share over a 7-year time frame. This chart actually shows how the amplification works in practice. By selling digital credit, we create an amplification. So if Bitcoin ARR was 10%, we could achieve a 12% to 19% ARR. If Bitcoin was a 30% ARR, we could achieve a 36% to 45% if we execute on our strategy. So clearly, the equity is for vol junkies and performance junkies, they want to outperform. This is how we believe you can best outperform Bitcoin in the most responsible fashion while doing the most good for the world. And for the other end of the spectrum, for the credit investors that can't stand the vol, they want principal protection and low vol and no currency risk and they want clear yield and they want tax-efficient treatment, well, then they have digital credit and Stretch specifically. Let's go to the next slide. So I would end with this thought, right? Bitcoin is digital capital. We believe in it. We will continue to advocate for it. And for the pure capital investor, you should buy it. Stretch is digital credit. If you don't know what you want, but you believe in digital assets and you believe in digital capital, you probably want Stretch. It's 11.25% dividend paid monthly, tax deferred. If you're a corporate treasurer, if you're a retiree, if you've got money that you need 3 months from now to pay your kid's tuition, but you want to invest it in more than 2% after tax, well, then Stretch is an option for you, right? So Stretch clearly is the flagship product. And if you believe in the future of digital credit and you want to invest in the company that is making it possible, and you would buy our equity. And if you do that, you should probably have a 7-year time horizon because we're long-term thinkers, we're not -- when -- every day is not going to be a great day, every week, every month. If our thesis is wrong for 100 years, the equity won't work, and we'll run out of money to pay the dividends at some point in 100 years. If our thesis doesn't work for 10 years straight, if that doesn't work, then the credit will get paid -- the dividends will get paid, the equity won't be a great investment for you. But if we actually execute and if over the next 7 to 10 years, things work out fine, the company is well managed, well collateralized and responsibly structured so that we can stand difficult months, difficult quarters, even difficult years or 2 or 3-year cycles at a time. We've done it before. And we're prepared to do it going forward. So with that, thank you. And I think I'll pass over the floor to open Q&A.

Thank you, Michael. We are now going to proceed to the interactive live Q&A section of our webinar. I would like to welcome all our Q&A guests and invite them to come on video. We look forward to hearing your questions. [Operator Instructions] So for the first question, I would like to invite Lance Vitanza, our research analyst from TD.

My question is, since the beginning of the year, I can count 3 weeks over which your Bitcoin acquisitions have generated negative -- slightly negative, but negative Bitcoin yield. Now I'm all in favor of buying Bitcoin even when times are tough, but shouldn't the goal be to increase Bitcoin per share at all times rather than just increasing the total amount of Bitcoin that you own? And maybe if you could just talk about the strategy or the thinking that went into those 3 particular weeks and what that could mean going forward?

Yes, we agree with you. We -- those -- we don't aim to reproduce those weeks. The times that we've actually done dilutive transactions on a Bitcoin per share basis were -- if you go back to the crypto winter when we had to recapitalize some toxic debt on our balance sheet, we took out debt either it was like asset-backed loans or senior debt that had EBITDA covenants that we felt were crippling the company's growth prospects. And so we didn't do it enthusiastically, but we did it because over the 10-year time frame, we knew we needed to remove those toxic elements to our balance sheet. If you look at these 3 weeks, when we took actions that were somewhat dilutive, they all were generally associated with building up the U.S. dollar reserve. And we did that in response to analysis and feedback from the market and some reflexive concerns that we wouldn't be able to pay the dividend if the equity capital markets closed us. So we wanted to get ahead of that and address the credit quality. So the reason we did it, the short answer is we do it to improve the creditworthiness of the company. And if we felt that there was a credit problem, we would do it. Right now, we feel that we've built the U.S. dollar reserve to the level where we don't have a credit problem. We're good for the next few years. We don't have any of those other forms of debt, the senior debt or the asset-backed lending. So the balance sheet is in much better shape today. Going forward, we wouldn't electively or programmatically issue equity to buy Bitcoin if it was going to decrease Bitcoin per share, right? We're -- we don't think that's a good idea. We would only take those actions when we feel like it's essential to defend the credit of the company because if people lose confidence in the credit, then that will ripple into losing confidence in the equity and then losing confidence in the business model in general. So it's a practical consideration. But I don't think we expect to see anything of that magnitude going forward because the first USD 2.25 billion of U.S. dollar reserve was a big move.

And just if I could just get a follow-up question regarding that $2.5 billion cash reserve, could you -- in theory, could you use that -- if you chose, could you use that to redeem the $1 billion of converts that are putable in September of '27?

Yes, we could. We can use it for any corporate purpose. We can use it to pay dividends. We could use it to meet a credit obligation. We could use it to pay interest on a loan. We could use it for whatever.

Great. Thank you. For the next question, I would like to invite Tom Lee from Fundstrat and Bitmine.

Really useful presentation. I took a ton of notes. But I wanted to ask you a 2-part question. I apologize, it's 2 parts. On Slide 53, you talked about quantum vulnerability of Bitcoin. And I apologize, and it's getting a little nerdy, but I know a lot of people have questions about quantum vulnerability because -- of course, Bitcoin could upgrade its network. But I know there's 3 types of wallets that remain quantum vulnerable. One is Satoshi because he used a paid to public key, a really old wallet. And then anyone who's sent Bitcoin reveals their public key. And then as you know, the taproot wallets actually are somewhat quantum vulnerable. So I think that's like 25% or 30% of all Bitcoin wallets out there. So the part one question is, you -- I know MicroStrategy is a security expert. You have so much experience in security. Could you give us some idea of how Bitcoin and the core developers might think about addressing the quantum vulnerable wallets. But the second part is, that's really a small part of the story because there's 4.4 million -- there's only 4.4 million wallets that have even $10,000 worth of Bitcoin, which means what -- whereas there's almost 1 billion accounts globally that have $10,000 of stocks, bonds or cash, meaning the world hasn't really adopted Bitcoin yet. And so as you think about the rest of this year, could you give us like what you think are some milestones or road maps that further drive Bitcoin adoption, which in turn help the price of Bitcoin.

So with regard to the first, the quantum question, I don't think it's appropriate for us to advocate a particular solution or a particular approach nor a particular time frame. I think that our role is to support all of the various communities and facilitate the evolution of consensus about what should be done, how it should be done, when it should be done. And I think that if you accelerate those and pressurize those processes, you end up solving a bunch of problems that don't exist in a way that maybe are iatrogenic. So we don't have a particular set of policy points that we wish to advocate right now, nor do I think it's really responsible or appropriate for us to do that. I think that, that will be emergent exactly what should be done. By the way, it's not clear anything should be done ever. It's quite possible we'll actually pop out -- you remember, the world was going to end in climate change, death 26 years ago when 26 years went by and none of those things happened, we were going to -- Bitcoin was going to boil the ocean and use all the energy on earth as late as 2018, and that never happened. So it's possible that whatever happens in the quantum domain will actually improve the security of the Bitcoin network inadvertently before we have to even discuss a protocol change. So I don't think there's any particular policies to be advocating right now other than to support all the various communities and facilitate consensus at the right time to do the right things. The second topic is really what are the catalysts for Bitcoin price to improve. Look, I think the fundamental catalysts are regulatory support. We have a very -- we have the most constructive set of financial regulators in the history of the industry right now. The head of the Fed, the head of the Treasury, the head of the CFTC, the head of the SEC and the White House has a digital asset

For the next question, I would like to invite Pete Christiansen from Citi.

Michael, I want to talk about events of the last week. On Friday, the President presented his nominee for next Fed Chair, which exacerbated volatility across a number of asset classes, including Bitcoin. The good news is Kevin Warsh is on the tape noting that Bitcoin is the new gold. So that's good. But I guess my question is, how would strategy's capital allocation framework or possibly if it would change, if the next Fed share is perceived to be less independent, perhaps maybe more tolerant of fiscal dominance, that may raise Bitcoin prices short term. But longer term, it may introduce increased rate volatility, which may be a challenge on the funding side. I'm just curious if you have any perspectives on how that might change the capital allocation framework for strategy.

We try to be very reactive to market signals. So for example, when our equity trades weak, we don't sell it. When our credit instruments are trading weak when the cost of credit is too high, we don't sell them. The most obvious is STRC, if it trades below 100, we don't sell it. So in periods where the marketplace loses confidence in our particular credit instruments, we simply wait. And in periods when the NAV of the equity explodes to 3 or 3.5, we might sell $1 billion a day, right? So when the capital markets are enthusiastic about either the equity or the credit, we react to them. And it's above our pay grade to set financial policy. It's even above our pay grade to interpret like the financial policy, like sometimes the macro economy has one set of numbers, and you would think that's good for Bitcoin, but it's bad for Bitcoin. Or another time, you would say, well, if they do this, that should be good for us and it's not good for us. And in other times, it's the opposite. I think the nice thing about our business is we have the option to do nothing. And we have a set of disciplined capital markets programs. They've moved from being discrete where it's like, well, we got to do a deal this quarter. What's the deal we're going to do in Q3? And we've moved from discrete 144A capital markets programs to continuous ATM type programs. And with the ATMs, if the market thinks that the cost of capital on an instrument like STRF should be 11%, well, we just don't want to sell it. We think it ought to go to 8%. So when the market takes STRF to $140 or whatever the price it is that we think is fair, then we will be open to issuing more. And when the market is bearish on those instruments, we don't. And the good thing about the business is if you think Bitcoin is going to grow pill in a number, 30% a year, then our option is just do nothing, and we're a company that's a $45 billion, $50 billion company growing 30% a year. So that's our default. Our default -- if you think Bitcoin is only going to grow 10% or 20% a year, our default is we just do nothing and we grow at the rate of Bitcoin, and we're okay with that. And then if we think that there's something very accretive, that's going to be good for the shareholders, then we will participate. And we can participate in size, $1 million a day, $100 million a day, $1 billion a day. And the truth is, Pete, sometimes we get up in the morning, and we basically set up our programs and we think, well, nothing is going to happen today and then 5 minutes before the market closes, a lot of stuff happens. Like it can literally change in 60 seconds. And again, that's beyond our control. We can't control how the markets will interpret all these things. What we can do is set up a rational set of credit structures so that we only issue credit when we think it's in the best interest of the company, and we only issue equity when it's in the best interest of the company.

I would like to invite [ Lynn Alden ] from [ Lynn Alden Investment Strategy ].

Given the popularity of STRC, my question is focused on that. The company established that USD reserve, which I think shored up the confidence of these products and make them more attractive. Right now, the USD reserve is on the website, 30 months of coverage compared to the dividends of the preferreds. The other preferreds are fixed dividends. STRC is a variable dividend, which introduces some degree of uncertainty around how many months of coverage there are for the total amount of dividends payable. Do you have any kind of views on what you think is an appropriate minimum reserve relative to months of dividend coverage? Or do you have a kind of a maximum that you'd be willing to pay on a dividend for STRC? And then a related question is, we are seeing some kind of early financial products that are out in the market that are looking to potentially leverage STRC given the goal of low volatility and high yield. Are you monitoring the space for leverage build on top of that as it could contribute to spikes of volatility should there be an issue in the market? And do you have any -- are you -- would you encourage that kind of thing? Or would you dissuade leverage from building on top of that increasingly kind of a popular product?

I can start, [ Lynn ]. Thanks for the question. First, we said that we target 2 to 3 years of dividend coverage with the U.S. dollar reserve. So we wouldn't want it to go below 2 years. I think 3 years would be pretty high. And as far as whether we think there's a cap to the Stretch rate, we're pretty early on, and we're sort of trying to understand what happens every single month at the end of the month, and that's why we have our guidance that we have, right? Instead of $11.25, could we take it to 12 potentially? But it's going to be a function of how do we keep the price within a tight range right around that $100 and also a function of what happens to interest rates in general. But I don't think we have a cap right now. We're just going to have to see how this instrument plays out over time. So that's the answer on Stretch overall. And your second question, remind me?

The second question was around we're seeing kind of early products potentially looking to lever it up for other customers. Do you perceive issues in that? Are you monitoring it? Would you encourage or dissuade that type of activity?

I think any time people create products on top of Stretch, right? There are some products that we've seen like buck that have been issued that are -- they're not levered products, but they're actually reducing the volatility down to about 0, and they're actually showing daily accruals as opposed to monthly accruals. So I think those are positive. I think the extent people are going to build levered products, one, we can't really -- we're not going to stop them. And I think leverage adds liquidity, adds a certain extent, interest in Stretch. And we'll see how it plays out over time. But I don't necessarily think that's a bad thing.

Okay. So we can move on to the next question. For that, I would like to invite Mark Palmer from Benchmark.

A couple of questions. First of all, we have seen over the last year, a tremendous number of new digital asset treasury companies formed. Many of them focused on accumulating Bitcoin, others on accumulating other crypto tokens. What is your take on how this industry is likely to evolve in terms of the number of players, whether there's going to be a shakeout, if there is a shakeout, will there be consolidation? And most importantly, what could this all mean for strategy as it unfolds? Are there opportunities for the company to take advantage of that dynamic?

I think every business has to have an operating model that works, that adds value if it's going to grow and prosper. So one model is just to provide Bitcoin exposure if people in the country in question can't get it any other way. There are a lot of people in the U.K. that bought our stock for 4 years because they just couldn't buy Bitcoin any other way. So if there's a value proposition in Brazil or in France or wherever, then maybe just you can be a simple Bitcoin holder. I think another value proposition is issue digital credit, and you can see that Stryve and MetapPinet have both pursued digital credit. If you're good at it, by the way, you can do digital credit and not be good at it, right? If you take on debt, you can't pay back, right? And that doesn't help the company, that hurts the company. But if you're good at digital credit, that could be another case. 1/3 would be anything that uses capital, right? So if these companies -- if they want to generate Bitcoin yield, they're going to have to find some way to generate a benefit from the capital, right? You could underwrite insurance, you could support trading or derivatives trading by posting it as collateral. You can engage in derivatives trading, right? You could literally become a public company with a lot of capital that trades in a digital derivatives market, posting your Bitcoin as the collateral to take the trade and sell the volatility. It's a different business model. What do I think? I think there's thousands of companies that get launched. Many don't succeed. Some will fail. Some get launched doing one thing and then they evolve into something different. like look at our company, we evolved. In fact, you could argue that the most successful companies evolved through 2, 3, 4 stages in their life cycle. I mean, Apple didn't start out as a phone company for sure. And I think Elon maybe he ends up being a robot company and not a car company, right, at Tesla. So I think that the winners will evolve and they'll find a niche. And I think that the ones that don't evolve, if you're just a holding company holding Bitcoin, not doing anything with it, might you get bought up? Yes, you might get bought and would that be good for you? You're a lot better off if you have something people want to buy, for example, Sears had a future because they had a lot of real estate that somebody wanted to own. And if they didn't own the real estate, it would have been a much worse situation for them. So I think that you're going to see all sorts of examples. Now -- and presumably thousands and thousands of companies get launched and they all do different things, and we're very embryonic early on, like in the first year or 2 years. 50 years from now, right? I mean, the debate will be who's the best Bitcoin-backed insurance company, right? But 20, 30, 40 years from now, and that company doesn't even exist right now. But on the other hand, what about us? Are they opportunities for us? Well, they were an opportunity for Stryve. Stryve did the deal with similar and they closed it quickly, and they were able to build their capital base pretty rapidly. So that's -- we see examples of that. There probably will be some mergers and acquisitions of other companies in various spaces that they put together their various assets in a synergistic way. Our business is laser-like, monomiacally focused on one thing right now. we want to make Stretch, STRC, the premier credit instrument in the digital world, the best digital credit in the world and maybe the best credit in the world. If we can create a product that trades with less than 5 that pays you 10% dividend with a stable $100 value and we pay a rock dividend, the question is who would want that? It's like everybody would want that. I mean, why wouldn't you -- like what's the demand for that? It's infinite. Like -- so if Stretch works, it's the ideal product and the company that can create treasury credit based on digital capital has the ideal business model. And so we generally won't get distracted, right? The #1 risk for us is a dilutive distraction, right? Everything else on our capital structure that undermines the credit of Stretch is a question mark, right? So you have to be thinking about that. And then anything we might do that looks complicated or risky or different would -- anything that introduces a question in the mind of the Stretch investor, can we pay the dividend? That's going to be deemed negative. Anything that introduces a question in the equity investors' mind, can you outperform Bitcoin? So generally, generally, we're pretty skeptical on acquisitions because they take a long time and then you might acquire something that you didn't want that you have to divest and then everybody wants to talk about how and why and how long it takes. And so I don't think -- I wouldn't say it's not a good strategy for other companies and other investors. There are other companies and other investors for which it's a great opportunity for them, and they can make a lot of money and they will pursue it and God bless them. For us, we believe we've stumbled upon maybe the most promising product, STRC. After 20 capital markets transactions and all sorts of credit instruments, we think we found the best one for us and for the credit investor. And we've -- and we think we found a great business model, right, the treasury company. If you can generate return of capital dividends scalably and scale up the issuance of treasury credit, you've got maybe one of the most efficient business models in the world and one of the most compelling products in the world. So we don't want to do anything that would dilute that focus, undermine the credit of the balance sheet or distract the management team from what we see is a once-in-a-lifetime opportunity.

For the next question, I would like to invite Larry Lepard from Equity Management Associates.

Yes. Thanks for having me on, guys. First off, 2 great things in my view, came out of the call. One, the whole guidance on the STRC rate. I mean that's brilliant. I really love it, and it's going to help people like me who are buying STRC as kind of a solid retirement type of asset to understand where it's going. And I have a question related to that, but I'd like to put it to the end. The second thing that I thought was really important was the notion that we're going to upgrade -- we're going to upgrade and play a leadership role in the technical direction of Bitcoin. I think that's fabulous and a great way of addressing all the f around Quantum, which I think is probably scared off a few of the bigger institutions who are looking at it and kind of saying, hey, who controls this whole thing. Just back to first principles, I want to just kind of run through how I look at this and see if you, as a management team agree I'm a value investor. I look for asymmetry. And in my view, right now, MicroStrategy is the most asymmetric value investment in the world, and most people don't understand it. And it's kind of stunning to me. My partner, David Foley and I, we did a model. We've done several models, and we've looked at it and said, if Bitcoin stays at $50,000 for 4 or 5 years, you can't break this company. It's unbreakable. I mean the dilution -- we calculate the dilution would maybe be 15% or 20%. So the downside case here in our view is really covered as a result of the fact that the debt is unsecured and the interest rate on it is very, very low. Some of it's convertible, as we all know. And the preferred is really equity. So to me, you've got an unbelievable situation. I think a lot of people listening to this call are kind of wondering, "Hey, what's going on with the stock price, what's going on with Bitcoin." My view on that is just that what's going on with Bitcoin is liquidity is really tight. And this is what's going to drive a big print at sometime relatively soon. And it's also what's driving the stock market down, and Bitcoin has always been kind of a leading indicator of where -- how much liquidity is out there. And so things are tight right now, and you see it, gold is getting hit, silver is getting hit, all of a sudden money assets are getting hit. But we know that the basement trade is alive and well because gold and silver have just been on a tear. And this reminds me very much of 2020 when gold and silver led first and Bitcoin followed harder. Bitcoin went up 6x in October of 2020 after gold had gone up 45% when Pell pivoted and then COVID came along. So to me, what's going to happen here is this thing is going to be a 2-bagger, 5 bagger, 10 bagger and most people don't really understand it. And I think the reason that's the case is kind of said where he said, commodities are a very, very hard business to invest in because they have long cycles and the average investor who's being marked quarter-to-quarter, month-to-month, year-to-year can't show long time preference. He didn't use those words, but he was essentially saying the same thing, which is Seifadine's point. And if you have the long time preference, you realize this is a commodity that has a fixed supply, the asymmetry, it's just -- it's absolutely blowing my mind. So I just want to say congrats for all you're doing. And I think it's a no-brainer that this is going to be an outstanding upside investment. I do have one specific question related to the Stretch product, and that is this. You're going to adjust it, okay? So maybe you have to adjust it in a while to get more people to buy it, fine. At some point, this is going to be a fabulous product. Everybody is going to want it. And if you kind of set the price at $100, could it ever adjust down? I mean, I'm buying it and I'll probably gift it to my kids because the tax basis will be 0, and I'll never sell it. Would be -- could you think about setting a lower boundary on the yield? I mean, 11%, that's attractive, 9%, 8%, 7%, those are all attractive. If it got so attractive that the yield on it started to go down to 5, 4, 3, 2, 1, that would be -- I mean, if people looking at buying it, thinking long, long term might wonder, is there a boundary below which this thing can fall? And we'd be better, we'd be more comfortable buying it if we knew there was such a boundary on the yield.

Go ahead, Phong.

I can start, Larry, and we agree with all your points. I think there's a significant misunderstanding of the leverage on the balance sheet and how we're going to service our convertible debt over time and these ideas that if Bitcoin price goes below our cost basis, that becomes an issue. And as I stated, Bitcoin needs to go down to $8,000 a coin and sit there for 5 years up until 2032 before we really have a problem being able to satisfy the convertible note. So thank you for pointing that out. On the rate on Stretch, right, right now, technically, the bottom of the rate would be SOFR, but we think of the fact that we get capital from Stretch. We put it into Bitcoin and Bitcoin is going to go up on average 30% a year. So anything that we pay less than, call it, 20% is accretive to our shareholders. So I don't think it's something where you should sit there and think that we're going to drive it down to SOFR, right? If Stretch price goes to $100 and sits at $100, we might take it down a couple of percentage points. But I don't think -- and obviously, it depends on where SOFR goes, but I don't think it's something that someone should think we're going to pull the rug out from under folks and drive it down to 1.

Yes. I think stating that publicly to people who are buying Stretch would be important just so people understand. And if you were to say something along the lines of we're not going to let it go below 7 or something because it's going to get to be really popular at some point in time. And those of us who are buying it are buying it with multi-decade time frames, right?

Yes. Another point to make is we can't lower the rate more than 25 basis points a month. So we're always going to be very incremental. And we would only lower the rate when -- in such a way that we thought it would stay in that zone of 99 to 101. Like we want to keep it target at 100. So you might 5 years from now find out that the rational credit spreads that the market assigns us are 300 basis points instead of 600 and that people would like to buy this thing at 400 basis points over SOFR, maybe. But we would very gradually get there and we would still expect STRC to be trading around 100. And so we're not looking to do anything that is jarring to the price. We want the price to be stable. As a practical matter, the reason that we would lower the dividend rate would be we had such an avalanche of demand. We had too much demand and people want to buy infinite, and we don't want to sell infinite because we'll drive the BTC rating of STRC down. right? Like if hypothetically, someone said, I want to buy $100 billion of STRC tomorrow, you can see how we don't want to sell it, right? Because then that's reflective and that would undermine the credit quality and that would increase the volatility and that kind of works against everything. So luckily for us, and practically, that's not going to happen, right? Like they say it's good that we have time because otherwise, everything would take place at the same time, right, all at once, all at once. We don't want stuff to happen all at once. So it will happen progressively. We'll be very thoughtful about it. Our goal is always for it to be extremely compelling to attract capital. and at the point where we feel like we've got too much capital. It would be a circumstance, Larry, where there was massive success of STRC and Bitcoin was lagging and MSTR equity premium was lagging and it's that weird situation where it's hard for the company to increase its collateral base in order to back the credit. And then we would say we have too much demand for the credit, so we need to click it down. But if there's over demand for the credit, it would still be pegged at 100 when we -- and we take it down 25 basis points. And so we're going to responsibly manage this so as to minimize volatility, maximize stability, and in all likelihood, it's going to be excessively compelling in terms of dividend rate for quite a while because even though you believe in Bitcoin as collateral and I believe in Bitcoin as collateral, we've got a lot of work to do with credit rating agencies and the Basel rules and traditional finance establishment before they recognize it as being good collateral. And as long as they don't, then that means probably the spreads are going to stay pretty compelling.

For the next question, can we have Andrew Harte from BTIG.

So it'd be great to hear some examples of some of the doors that have been open since strategy got a credit rating. Back in the fall, I think it's opened -- potentially open doors to pension funds, insurance companies and other really large institutional investors. And Michael, before we got on this webcast, you said something like times today that we're seeing with Bitcoin is when people are looking for insight and leadership. So I guess who better to ask, right, what is your expectation for conversations with these new potential investors with these really large pools of capital? If you could also shed some light on how the conversations to date since you've gotten that credit rating have evolved.

Sorry, go ahead, Andrew.

I was going to start, and Phong, please jump in. Look, Andrew, thank you for the question. I think the process with the rating agencies was an excellent process I think we've noted that we've had a credit rating in the past. It was more based on the legacy business. This is the first time a Bitcoin treasury company with a framework specific to that was rated by a major credit agency. I think overall, the reaction has been what we had expected, right? Like there is now a public profile that investors can look to. It is opening up, I think, interest. I think it's still early though, right? I think a lot of us that have been in these types of markets know that the credit rating agencies take time to develop. I think we noted earlier in the presentation that we believe we've made strides since the launch of the -- relaunch of the rating that we'll continue to make progress I think there's more to do in that sense. And there -- it's sort of created a little bit of a floor, so to speak, because everything we do here will be incrementally increasing the capital base. It will increase our ability to strengthen our balance sheet. And so I think in the long run, it may be -- it may take longer than it would take a near-term action. But I think that there's possible upside. I think that will continue to drive more large institutional demand. And to answer your question, I think the reaction from the investor base has been net positive. And certainly, the cash reserve has added on to that as well.

Mike, do you want to cover the second question around just general Bitcoin?

Just restate the question again.

I was wondering how the conversations you've had with these really large -- very large investors have come along. And then before we got on, you said times like this is when people are looking for insight and leadership. And so as you continue to have those conversations with people that are new to Bitcoin, what do you tell them in a day like today?

I think we've got an unprecedented number of invitations to financial conferences and meetings with investors in general. And I think that the amount of interest in this topic explodes. And when the volatility explodes, the engagement explodes. What I would tell them is the same. We've kind of said for a while, Bitcoin's capital investment, your time horizon needs to be minimal 4 years. I would actually say, look at the moving -- the simple moving 200-week average, the 200-week simple moving average or the 4-year average, and I would invest like with a 4-year DCA dollar cost averaging type approach if you're going to invest in Bitcoin. And you really want to have the intent to hold the product -- hold the asset for a decade. And if you can't stomach -- if you can't wait a decade with no cash flow and if you can't stand the volatility, then I would say you ought to buy the credit. If you believe in digital assets or digital capital, you believe in Bitcoin, but you can't stand to wait for a decade and take the vol, you should buy the credit and just take the 11% tax deferred with much, much less volatility and with someone else stomaching, the pain for you. And so I think it's kind of simple, right? You either don't believe in Bitcoin at all and then you don't want the credit or the capital or you believe in Bitcoin as a maxi and you want the equity because you want 2x Bitcoin or you want Bitcoin as sovereign and censorship resistant long-term store value to give you great grandkids who may be living in a country you're going to live in right now and you want to self-custody, then you buy the Bitcoin. Or you just think all this stuff looks really good, but you need the money back in September. then you think about the credit, right? And specifically the treasury credit because the other credit instruments are too complicated. So I would say we're really, at this point, pitching the credit, treasury credit as the first step in a Bitcoin journey for a traditional or conventional investor who believes in digital assets. And we're pitching to a lot of people, like we're talking to a lot, right? So there's a lot of conversations. And if anything, right, the volatility right here is the kind of the reason why you might want to have a product like STRC. If you wonder what's the justification? Well, just look at the 2 charts next to each other and you figure out why you might want the credit instrument.

Great. And for the last question here, I would like to invite Dan Hillery from Buck.

So my question is as follows: The de-equitization of the convertible notes has seemed to be a bit of a headwind for the cost of capital across all the preferred equities. And if MSCR continues to trade below the convertible note conversion price, how many months before the put date would you guys consider refinancing or retiring the converts at a discount in order to lower the cost of capital across all the digital credit instruments?

Dan, we went through this in 2022 during Bitcoin winter and our converts were at some point in time trading at $35 each and...

You mean $0.35 or $0.40 on the dollar, $0.35 on the dollar.

$0.35 on the dollar, and we had considered whether it made sense to call -- to buy some of those back, and it never really made a lot of sense, especially if you live in a world where you think Bitcoin price is going to go up. So the converts aren't really this big overhang for us. And as I mentioned, you need Bitcoin price to go down to $8,000 and sit there for 5, 6 years before it really becomes a problem. So it's not really something that we think about a lot of whether we're going to buy back any of the converts or if we're going to do something early with them right now.

I would say a year before we have a put event or a year before we have a redemption event, we certainly look at it and we look at the statistical likelihood of anything. And then we evaluate whether or not it makes sense to refinance or hedge or mitigate anything. And if we were to do it, we would want to do it 6 months before the event took place. So -- but right now, we're still far out of that window, and it's not clear there's any event. The last time I looked at one of our puts. It was -- the one that was coming due earliest, the bond was already above par, and so there is no risk to it. So when we get to a -- certainly, when you're more than 1 year out, it's all hypothetical worrying about something that's unlikely to ever happen. When you get to 1 year out, you have to consider whether there's a risk. And then we're certainly not going to wait until 1 month before we deal with the risk. We wouldn't wait until the last few weeks or the last few months. We would probably do it with a few quarters buffer at the latest, which means we start thinking about a year before.

Great. Thank you, everyone. This concludes the Q&A portion of the webinar. I would like to thank all the guests for the questions and all the attendees for tuning in live. We had over 3,000 people join us live on