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**TLDR: $ASST pinned at $27, warrants expire 10/10 same strike, 30% short interest waiting to pop, FOMC hold on 9/16 is the trigger — bullish next 4.5 weeks, don't care about the long game.**
Elephant in the room first - bought a spread because I just wanted a cheap long term BTC play for funsies but would have done it very differently if I’d known all the yap below beforehand. Ok, so…
$ASST is a leveraged bitcoin treasury company, currently sitting nicely around $27 off a late August pop mostly from bitcoin movement. This is an interesting one to look at for a few reasons, and would welcome some regarded perspectives.
A) A warrant is a contract issued from a company (Strive, in this case) that gives its holder the right to buy a stock directly from the company at a fixed cost. As of right now, there are warrants worth 26.5 million in underlying shares expiring 10/10 for a $27 strike. If these warrants are exercised, that’s 26.5 million **NEW** shares issued, creating $700M-$1.2B liquidity for strive immediately.
B) Strive is OMEGA shorted, something like 30% of the float is short interest, with \~8 days to cover (that’s a lot).
C) BTC is having a moment right now, showing some signs of the crypto bear market might be letting up, and lifting $ASST and other crypto treasury companies alongside it. A lot of this was a reaction to crazy moves like buying back bonds to lower the yield or dovish signals from the fed that don’t feel as likely today, which leads me into…
D) The fed will be announcing their decision on rates 9/16, next Tuesday. At this point, even a hold is good news - jobs came in hot, inflation this week is likely to not look too great, and with oil prices spiking it seems like close to a sure thing.
Now $ASST has been holding right around $27 the last few days, and there is an obvious battlefield aimed at keeping it there - tons of volume, massive sell walls popping up at different $27.xx spots throughout the day, but buy pressure is keeping it in the game. The theory is the short interest is largely warrant holders running arbitrage, but if the stock keeps going up they’ll start executing warrants to cover and the naked shorters are gonna have to start covering hugely, producing a rapid increase of the value of the stock (avoiding a word the auto mod doesn’t like here).
The risk is that the inflation report sucks and the fed hikes the rates, btc crumbles, the stock - which again, is a leveraged treasury built upon that coin - will crumble alongside it and the warrants will expire worthless. Totally possible.
The gamble: inflation report comes in “meh”, giving the fed enough plausible deniability to hold rates through midterms and keep BTC dreams alive for another 1.5 months - there is honestly enough political pressure that this may happen even if inflation looks pretty bad. Assuming we get the hold, I think this stock is gonna RIP because those warrants have nothing other than chaos (aka a Truth bomb) in their way from 9/16 to their 10/10 expiration and quite honestly I think the administration is on their side. What makes this even *more* interesting is there is actually a compelling reason the stock may stay up even if BTC halts or drops - which is the $700 - $1.2B of liquidity Strive gains if those warrants execute. Pivot that capital directly into BTC buys when it’s down, that’s a great DCA for the past 8 weeks of buying they’ve been doing, and a MASSIVE addition to the treasury stack (already the worlds 5th largest).
All that to say, I really like the stock for the next 4.5 weeks, and I think there is a lot of factors favoring a near term pump - questionable, to bearish on the long term personally but who cares. I’m here for a good time not a long time.