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20 Jul, 11 tweets, 3 min read
Like something you've read here? Here is a master compilation of all @TheLastBearSta1 threads that you make also enjoy.

Thank you all for the engagement and support!
1. The RoboTaxi Repo - Part 1 (April 2021)
2. The RoboTaxi Repo - Part 2 (April 2021)
3. Tether "Magic Beans" (May 2021)
4. Equity Tail Risks - China Credit Market (June 2021)
5. MicroStrategy Expanded Thread (June 2021)
6. Bear Porn Chart Compilation (June 2021)
7. Equity Market Bear Case Thesis (June 2021)
8. $MCW Mister Car Wash Case Study (June 2021)
9. Reverse Repo Thread (June 2021)
10. Evergrande and its Implications (July 2021)

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More from @TheLastBearSta1

TheLastBearStanding Profile picture
20 Jul
🚨🚨 1. Evergrande thread since its liquidity crisis which has been playing out for over a year seems to be quickly accelerating and why it matters 👇👇
2. Evergrande is the largest property developer in China, has been caught in a debt spiral for years and seems finally on the edge of insolvency.
3. It has US$107b of "debt" on B/S as of 12/31 with half due this year. But this dramatically understates its obligations. Add $80bn of commercial paper (some may overlap with the B/S debt). Add $90bn of stretched A/P. Add construction capex for presold apts. Add off B/S debt
Read 20 tweets
TheLastBearStanding Profile picture
25 Jun
1. In light of the Mr. Carwash IPO ( $MCW ), here's a case study I did a couple years ago pitching a carwash roll-up strategy: 35% IRR / 4.4x MOIC as modeled assuming a modest 10x EBITDA exit. Was always partial to the idea (didn't get the job) so figured I'd share with you all! Image
2. There's a couple different kinds of car wash. Express (conveyor belt) carwashes are the best and growing segment. Image
3. Underlying trends are good -> growing fleet of cars, more people using professional carwashes vs washing at home, and conveyor express carwashes taking share from older carwash styles Image
Read 11 tweets
TheLastBearStanding Profile picture
24 Jun
1. Many seem to believe "the great reopening" is going to lead to accelerating job creation and economic activity. Bad news folks, the reopening already happened. It started in May 2020 and now is largely complete. The remaining business activity restricted by COVID is minimal
2. There has been permanent demand destruction and economic scarring. What's left to come (int'l tourism, white collar workers returning to office, full school reopening) are the final dregs, not the main show. The diminishing marginal gains have been clear since summer 2020.
3. Strong job numbers in March were merely a rebound from the Winter wave dip, not the beginning of a new positive trend.
Read 7 tweets
TheLastBearStanding Profile picture
22 Jun
1. My thesis on the market is pretty simple. The market thinks this we are in September 2011 - early recovery stage with inflation concerns. In reality we are in September 2008. The first shoe has dropped but the second will be the knockout punch.
2. Recall that the housing market peaked in 2006, stocks peaked in 2007, and the market crises didn't occur until 2008.
3. The post GFC "conventional wisdom" was that the Fed could have avoided the crises by acting earlier and stronger, including a Lehman bailout. Powell followed this wisdom as COVID began to crater markets by unleashing unprecedented accommodation together with fiscal stimulus
Read 19 tweets
TheLastBearStanding Profile picture
15 Jun
1. 🚨🚨Another $MSTR thread because its too amazing not to - this time from the beginning 👇👇:
2. $MSTR is a no-growth software business that generally makes decent cash flow. The company had been totally unlevered as accumulated significant cash balances. Historically, the market implied asset value of the business has been $0.7 - $1.5bn, on average ~15x EBITDA
3. Having built up over $600M cash balance by mid-2020, $MSTR decides to invest $250M in BTC at $11k and offer a $250M tender offer on its common with a cap price of $140/sh. $MSTR runs to $140 in a day, capping the tender offer at ~$60m shares
Read 17 tweets
TheLastBearStanding Profile picture
8 Jun
TLDR: MSTR offering today is a lesson in getting PRIMED. Once the 2025 converts go out of the money (which they will), the notes will drop from 135 now to ~70 as they will be forced to price as a zero coupon with a ~7% rate. This is the easiest short in the world.
Math: Current MSTR share price implies $53k BTC price. The conversion on the 2025s implies a $48k BTC price. If the conversion is not in the money, those notes will price as an (almost) zero coupon bond with a ~5% yield. That is 40% down from its current price.
*Not investment advice* (most of us can't short converts anyway)

For a neutral trade, you could short / buy puts on $MSTR paired with long BTC to squeeze the arbitrage.

For directional exposure deep OTM puts could print on further BTC breakdown
Read 4 tweets

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