When you could sell $100 strike calls and make $5-7 premium. Sorry to whoever I sold these to, but hopefully we get there one day again soon. Crazy it was just 5 months ago. 😆
Selling shares to buy back makes no sense, and neither does selling staking rewards for cash / putting selling pressure on the underlying to raise cash. Presumably BMNR will spend most of their cash acquiring ETH and run a pretty lean cash balance after achieving targets. And right now, there is no real cash flowing component to the company, so where would funds for a buyback come from?
In one of the podcasts I listened to prior to investing in BMNR, Tom was discussing the valuation multiple he expected for staking rewards. He theorized that staking yield should generate multiples near tech and other growth names’ EPS multiples - somewhere in the realm of 20-30x or more.
To me, this seemed logical. No ETH DATs were staking large sums of ETH at the time, but staking rewards paid in ETH can be converted to USD and paid as dividends or in ofher investments, so it’s essentially just as good as cash flows from any business generating 20-30x EPS multiples.
Unfortunately, the market doesn’t appear to see staking rewards this way. BMNR is currently pacing for $250mm+ of staking rewards over the next 12 months and is trading at a major discount to MNAV. It’s as if the markets apply zero multiple to staking yields, zero to moonshots, and a discount to the crypto all in one.
In hindsight, staking yields aren’t as fungible as cash flows because they are paid in non-USD, and must be converted by selling, which adds pressure to the underlying asset of the company, so cashing out any staking rewards in large quantities in the future won’t be easy. And if they are left in rewards, then the return generated by the additional ETH will be ~3%. So, the market is saying essentially that staking rewards are worth zero to possibly the 3% yield they’d generate.
I think this may be the fatal miscalculation Tom had in pitching BMNR. If staking yields did in fact generate a 20-30x multiple, BMNR would be adding $6 billion in market cap from current staking yields and would be trading somewhere near a 1.4 MNAV at a $17.5 billion market cap. Instead, the markets appear to treat staking yields as a non-factor. I know it has been a short time, but markets are quick to price out major miscalculations and a 40% discount would have been gobbled already. This leads me to believe markets are correct and next to no multiple will be applied to staking yields because of how hard they are to convert to cash without applying pressure to underlying and how the future cash flows are easily projectable based on staking yields and price projections for ETH.
So, my theory is that he misread the market’s view of staking yields and assumed he’d be running easily a 1.2-1.4 MNAV consistently like MSTR, but has instead been handed a fat zero for income generated and is instead working from an MNAV deficit - thus killing the ability for BMNR to actually perform its objectives. But, I’m a smooth brain ape so feel free to poke holes in the theory.
I like to think Tom has actual intentions for BMNR to perform rather than just collecting tens of millions in pay for helping retail (and Cathie Wood lmao) be exit liquidity.
Howdy! My wife just gave birth a few days ago to our second child. We’ve got a toddler, so she’s been a little behind on the self-care. For Mother’s Day, going to have my son get her a nail salon gift card.
I’m looking for the best luxury nail experience around - somewhere she can spend a few hours maybe. She’s very basic and doesn’t like long, crazy nail designs. She’ll probably get a solid color for feet and hands, but I do want it to be luxurious in other ways. Maybe a place she can have a wine/mimosa, get a leg/foot massage, possibly some other services if she wants.
When I google, seems all the best-rated places are more highly rated for their designs but I’m looking for the experience more than the nail design.
Bonus points if it’s in South Charlotte but she’ll drive.