Michael Saylor

Well, by law, you can't pay a dividend on a preferred stock that would create an insolvency event for the issuer.

Like the board has to approve the dividend.

So you understand like it's literally impossible.

It is literally impossible to create an insolvency or to bankrupt an issuer of a preferred stock.

So people worry, whereas if you basically borrowed a million dollars from an exchange, they wipe you out in one minute, you're gone.

But in this particular case, in 27 years after a parade of 947 horribles, if the company couldn't pay the dividend without being insolvent, it would suspend the dividend for 12 weeks.

You know, it's like, okay, so what is the risk?

It's an equity risk.

It's not a credit risk in the sense of there's no credit instrument that comes due that unwinds the capital structure.

The risk primarily is...

You know, if you do this and you buy Bitcoin and Bitcoin doesn't go up forever, then what happens?

Well, the equity investors aren't going to make a lot of money on that trade, right?

If you're paying SOFR plus a credit spread or 10% and Bitcoin goes up 0%, the equity investors and the company didn't make money on that trade.

But that's all.

It just wasn't profitable to the equity.

And if you're wrong for 50 years, well, then there might be a risk to the preferred equity.

But you see, we've taken something that would be a risk in the next 50 minutes or 50 hours or 50 days, and we've turned it into a 50-year risk for the credit investor.

It's like we literally have 50 years of dividends.

Like how do you create this?

Well, you're over collateralized by a factor of 10, 20, 30.