Geopolitical Compass #59

'Journalism' called out for what it is.

TL;DR

• Tucker takes on a ‘journalist.’

• Corporate Bitcoin strategies.

• EUSSR ‘diplomats’

• US Presidential debate.

Australia

Tucker Carlson in Australia recently calling out a biased ‘journalist.’

Regardless of what you may think of Tucker, he raises valid points that today’s mass media is inundated with journalists who pose leading questions and assumptions designed to frame an argument only in the light they want to lead you. Sadly there is far too much of this worldwide today from an industry that is supposed to question government power instead of pandering to it.

We need more real journalists to make a comeback and replace the current iteration of lapdogs to authority. You can find the full Q&A session here.

Bitcoin

Since adopting it’s Bitcoin treasury strategy in 2020, MicroStrategy (MSTR) stock has increased by 10x.

In December 2023, the FASB issued the ASU 2023-08,1 change to accounting rules in which makes it much more palatable for other public companies to follow the same strategy.

Semler Scientific (SMLR) is the next major US listed company to implement the Bitcoin treasury strategy, announcing the switch in May. It then wasted no time in announcing a further $200M capital raise a week later. This for a company that had a market cap of $180M pre-Bitcoin announcement and nowhere to put its $60M cash stockpile.

Semler will be buying a further $200M of Bitcoin with these funds (they also announced a $50M ATM offering in addition to the above debt securities). This seems to be questioned by some, for me there is no doubt. They already conceded after exploring all options that they had nowhere to put their cash which is why they bought Bitcoin. Why on earth would they then turn around and raise $200M? To just hold more cash? No.

So that means we have a $50M ATM + $150M notes going into more Bitcoin. Add that to the current hodl of $50M, for a total BTC hodl of $250M. At current price, outstanding + incoming ATM shares = $300M market cap approx.

So Semler will be a profitable medtech company, who will be plowing future cashflow into more Bitcoin and in all likelihood conduct further debt offerings to buy more Bitcoin, and they're valued at only $50M more than the Bitcoin they're about to announce they hodl. That’s before the conduct further offerings and accumulate more Bitcoin, and before the BTC price rises further.

It's clear to me that Semler is following in the footsteps of MicroStrategy, and right now the shares are effectively available at only 20% above the soon to be announced hodl with the original business that was valued before the BTC strategy at around $130M (backing out the cash) now effectively only valued at $50M. Yes, I get we have ETFs now, but as with MSTR, the market doesn't have the foresight to understand what people and companies like Saylor and Semler are doing here. Supercharging a business with Bitcoin will seem like such an obvious smart move when looking back in the years ahead. The future optionality and financial gains are going to be astonishing.

MicroStrategy and now Semler are providing a service the market wants. Funds whose charters only permit them to invest in bonds want exposure to Bitcoin. These debt offerings allow fund managers a way to get that exposure. Their offering also allow market a safe way to capture the volatility of Bitcoin.

Two weeks ago MicroStrategy announced another $500 million round of convertible senior notes at 2.25%. As with every other offering they’ve issued, this raise was oversubscribed and increased to $800 million.

I expect this demand to continue and since we know over the long term where Bitcoin is going, the early adopters that can take advantage of the bond markets demand will benefit over proportionally.

EUSSR

The incoming chief diplomat of the EUSSR is Estonian Prime Minister, Kaja Kallas. A woman that openly states Russia should be torn apart and broken up into smaller countries. Very diplomatic.

Should we expect anything else from a Western Europe intent on self-destruction?

United States

There’s not much to be said to anyone who’s watched the debate. It simply confirms what we all know about Biden’s mental state. Democrats including perpetual Democrat party regime loyalist media CNN are now openly admitting Biden needs to be replaced. Conveniently the Democratic primaries have now passed, so a regime loyalist of choice can simply be appointed, no voting by the states required.

I’m sure that wasn’t the plan all along. Though its doubtful Newsom would want the nomination considering it’s pretty much a lame duck candidacy at this point. He may be a cabal loyalist, but he’s not stupid.

One point made by both Trump and Biden that I take exception to; ‘the United States is the greatest country in the world, and everyone knows it.’ I think we can safely put that tagline to rest for the moment. Does it still have the potential to be, yes. Is it currently? Absolutely not.

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