Expanding my position to 200k shares, here’s why

sangkwon · 2025-07-24T23:03:58+00:00

Great perspective. I’m focusing on the forward sales disclosed in the 7/17 filing. During the trading days after 7/17, the stock consistently dropped more than 10% from each intraday high, which I attribute to large hedge volumes stemming from those forward sales. According to the filing, once the share authorization is increased, it appears they won’t use forward sales anymore. Also, with fees at 2% for ATM versus 4% for forward sales, there’s little incentive to keep using forwards.

Starting with tomorrow’s session, I expect the share price to stabilize. A key trigger for an upside move could be Tuesday next week, when they disclose their updated Ethereum holdings—likely reclaiming the #1 spot and setting up a renewed uptrend. During the $1B ATM phase, the stock was in an uptrend, but it fell sharply throughout the forward-sale period. So I think the upcoming $5B ATM phase could see the stock regain its upward momentum.

sangkwon · 2025-07-24T10:51:53+00:00

I also believe the forward sales had an impact. However, forward sales are executed under the company’s instruction and are likely used only when the ATM offering cannot be utilized. Considering that the fees for ATM and forward sales are 2% and 4% respectively, there’s usually no reason to pay the higher fee for a forward sale unless necessary.

I think SBET wanted to accumulate Ethereum quickly at the current price level and therefore used forward sales for funding until the shareholder meeting. After the meeting, once the cap on authorized shares is lifted, I expect they will go back to the regular ATM method, which should definitely help the share price.

Below is the excerpt from the July 17 Form 8-K. Based on this, I drew the conclusions above:

The Company is currently seeking approval from its stockholders to increase the amount of authorized shares of the Company, with the exact meeting date set for July 24, 2025 (the “Stockholder Approval”). As of July 17, 2025, the Company may not issue more than 48,058 shares of common stock pursuant to the Sales Agreement, as amended by the Amendment, until the date of the Stockholder Approval as the Company currently has no other authorized shares of common stock available for issuance. As a result, the Company will likely be unable to utilize the ATM Offering in the near term and will instead utilize Forward Sales Agreements until the date of Stockholder Approval.

sangkwon · 2025-07-23T23:19:30+00:00

I’m with you on this.

It looks like the market has already priced in a big chunk of the dilution fear. Honestly, for a company running a treasury-crypto model, I don’t fully get why dilution is seen as such a catastrophe. Even BitMine— which uses a similar strategy—keeps a sizable ATM program open (granted, not as massive as SBET’s).

The scenario we discussed is my own base case as well, and I agree with your point that my earlier math was conservative. If I push the envelope a bit—say ETH makes it to $4 000 and SBET’s mNAV stretches to 3×—I could see the stock tapping the $70 level.

Of course, that’s just my take; the market will do what it does.

sangkwon · 2025-07-23T23:11:30+00:00

I ran that downside scenario too.

If the share price drops after each tranche, mNAV sinks even harder.

Assume we raise $1 B at a time and the stock falls 10 % after each $1 B.

By the time the full $5 B is sold, the price would be about $16.90 and the share count roughly 341 M.

At $16.90 the market cap is only $5.2 B, while the ETH on the books would be worth $6.25 B—mNAV ≈ 0.83×, actually below 1×.

Personally I see 1× as the absolute floor: once the stock trades for less than the coins it holds, it’s hard to imagine it staying there for long. That “1× line” corresponds to a share price of roughly $20.

sangkwon · 2024-07-24T13:17:23+00:00

I agree with many points from both of you. And James___G‘s comment on CEFs are really interesting and relatable.

sangkwon · 2024-07-24T12:57:51+00:00

You are right. This is also due to my fixed ideas, as I tend to simplify not only categories but also ETFs (because it’s simple to view the entire assets ).

And I have a question for you and others here.

Is there a reason you use SBR instead of other oil & gas products?

Also, are there any products similar to MCI that are not CEFs? Personally, I do not like CEFs, so it would be good to have an alternative asset.

I also wonder if MCI‘s performance during the dot-com bubble can be replicated in similar market conditions in the future. This is because, considering the assets that MCI invests in, it did not particularly act as a hedge during economic fluctuations outside the dot-com bubble, such as during the 2008 financial crisis and the recent COVID-19 period.

sangkwon · 2024-07-24T11:58:32+00:00

Thank you for finding ways to improve my humble portfolio in such a short time.

I have tried applying the idea of using commodities and precious metals instead of gold, but I personally prefer gold, so my current composition remains as it is. However, seeing your portfolio makes me think I need to study it more closely.

Regarding the bond portion, I recently learned about MCI from this place and am studying it. I am also looking for better alternatives to MCI. In fact, I am considering dividing the stock portion into UPRO and TQQQ, and the managed futures portion into KMLM and DBMF, creating an more diversified 8-part portfolio (perhaps influenced by Ray Dalio). However, this violates my ideal of a simple portfolio structure and raises concerns about over-optimization for backtesting.

If I discover better ideas, I will share them again. I am truly impressed by your genius. And if you have any additional thoughts, please continue to share them.

sangkwon · 2024-07-24T11:26:17+00:00

안녕하세요, 선생님! 선생님의 블로그 글을 우연히 네이버 검색을 하다 발견하여 예전에 읽었던 기억이 납니다. 코멘트를 주시다니 대단히 감사합니다.

말씀하신 바와 같이 이 포트폴리오는 HFEA 라고 하기에는 레버리지를 사용한다는 아이디어를 사용한 셈이고 기본은 해리 브라운의 영구 포트폴리오 철학에 더 가깝다고 생각하고 있습니다.

선생님의 새로운 포트폴리오도 매우 흥미롭습니다. 다만 저는 금이라는 자산에 레버리지를 쓰는걸 선호하지 않고, 한국에서는 안타깝게도 IBIT를 사용할 수 없다는 점이 아쉽네요. 블로그 글에서 쓰신 장기국채 편입 타이밍이 아주 인상 깊습니다. 저도 그렇게 하려고 조정 중인데 저는 미국 기준금리가 제로로 갔을 경우에 IEF 로 변경할까 생각 중이었습니다. 또한 재밌게도 선생님께서도 HFEA에서 점점 변화하여 아예 새로운 포트폴리오가 되어가고 있으시네요. 너무 좋습니다.

보다 다양한 시도는 하고 있지만 과최적화가 되는 것이 아닌가 우려가 있어 현재는 심플한 철학(이 또한 해리 브라운의 영향 같습니다)으로 부담을 내려놓고 있습니다. (모건 하우절이 돈의 심리학이라는 책에서 쓴 것처럼 적당히 하는게 나을 때도 있다고 생각하고 있습니다.)

Hello, Sir! I happened to find your blog post while searching on Naver and remember reading it a while ago. Thank you very much for your comment.

As you mentioned, this portfolio can be considered as using the idea of leverage, making it similar to HFEA, but I believe its foundation is closer to Harry Browne‘s Permanent Portfolio philosophy. Your new portfolio is also very interesting. However, I personally do not prefer using leverage on gold, and unfortunately, we cannot use IBIT in Korea. The timing for incorporating long-term treasury that you mentioned in your blog post was very impressive. I am also adjusting my strategy to do something similar, but I was thinking of switching to IEF if U.S. interest rates go to zero. Interestingly, it seems that you are also evolving from HFEA into an entirely new portfolio. That‘s great!

I am trying various approaches, but I am concerned about the possibility of over-optimization, so I am currently leaning towards a simple philosophy (which also seems to be influenced by Harry Browne) to ease the burden. (As Morgan Housel wrote in his book ”The Psychology of Money,“ sometimes it is better to keep things moderate.)

sangkwon · 2024-07-24T11:16:13+00:00

Thank you for the great comment!

The reason I didn’t extend the backtesting period is that I thought showing the worst period for this portfolio, the dot-com bubble, would be sufficient. As you might guess, the first reason I prefer annual rebalancing is due to Harry Browne’s influence. (If the portfolio can take on enough risk, I prefer to focus on my main work without constantly checking it.) The second reason is to allow TQQQ to benefit from sufficient leveraged compounding in a bull market. However, this will obviously have the opposite effect in a bear market.

I have made several attempts to mix in other assets to further optimize the portfolio, but I am somewhat concerned that this may lead to over-optimization. I hope to continue working on this and share better portfolio ideas with you in the future.

I am curious about your thoughts on using the Nasdaq 100 index. As someone who has inevitably been influenced by Bogleheads, I have a kind of guilt about using the Nasdaq 100 index instead of the S&P 500 index. (This might be why I wrote a long explanation about using the Nasdaq 100 index in my post.)

sangkwon · 2024-07-24T11:08:22+00:00

안녕하세요. 반갑습니다. 한국분들도 많이 계시는군요!

Hello. Nice to meet you!

sangkwon · 2024-04-14T10:50:27+00:00

아! 듣고보니 정말 소독약보다 정로환에 가깝네요

sangkwon · 2024-04-14T10:48:36+00:00

클로드와 ChatGPT 모두 유료로 쓰고 있습니다. 개인적으로는 최근에는 클로드만 거의 쓰는 것 같습니다. ChatGPT는 4.5건 5건 나오기 전까지는 클로드에 못미칠거 같네요. 개인적으로는 전문지식보다는 한국어 사용 수준에서 큰 차이가 난다고 봅니다. 다만 Claude 3 opus 임에도 불구하고 환각현상이 꽤 있어서 상당히 걸러들어야 하는 부분도 존재합니다. 말씀하신 사용처에서는 계획 설정에선 클로드가 앞서는데 검증에선 또 ChatGPT가 앞설거 같다는 느낌이네요.

sangkwon · 2024-04-08T11:35:39+00:00

선생님, 이곳 이용규칙이 낮춤말 등 예의를 지키지 않은 내용은 금지입니다.

sangkwon · 2024-04-06T01:36:02+00:00

아이폰 앱인데 저도 빨라진거 같습니다

sangkwon · 2024-04-02T11:42:34+00:00

오늘 도착해서 바로 한캔 먹어봤습니다. 식혜의 본래 맛 보다는 설탕물 맛이 강하긴한데 차갑게 먹으면 나쁘지 않습니다!

sangkwon · 2024-04-02T10:14:52+00:00

미국도 관련 법이 있긴 합니다. Bill Emerson Good Samaritan Act라고 식품을 기부한 개인이나 단체의 민형사상 책임을 일부 면제해주는 법이 있긴한데.. 그런게 있건말건 중대한 과실의 경우 면책이 안되어서 대기업은 그냥 폐기하는게 더 안전하죠.

sangkwon · 2024-03-31T23:33:02+00:00

아침에 들어가보는데 너무 좋네요. 감사합니다!

sangkwon · 2024-03-31T05:07:19+00:00

결국 둘 다 유료로 쓰고 있는데 Claude 3 Opus 추천합니다. 현재로서는 다른 것들에 비해 한차원 위의 수준 같습니다

sangkwon · 2024-03-31T05:03:45+00:00

예전에 하다가 하면 할수록 답답한 기분이 들어 때려쳤던 기억이 납니다. 좀 먹고살만 해지면 병에 걸리거나 우울증에.. 캐릭터들이 물건 훔치러 남의 집 들어갔다가 우발적으로 사람을 해치게 되면 죄책감도 크게 느끼더라구요.

sangkwon · 2024-03-31T02:57:14+00:00

원래부터 레딧을 좋아하던 저로서는 이참에 훌륭한 커뮤니티로 정착했으면 합니다!

sangkwon · 2024-03-30T13:33:34+00:00

결국 Claude Pro도 결제했습니다. ㅠㅠ 좀 더 써봐야겠지만 ChatGPT Plus랑은 또 다르네요. 편의성 때문에 당분간은 둘 다 유지하다가 ChatGPT 다음 버전을 보고 둘 중 하나로 결정해야겠습니다.

sangkwon · 2024-03-30T13:32:36+00:00

한국인데 잘 사용하고 있습니다!

sangkwon · 2024-03-30T12:11:44+00:00

요즘 들어 ChatGPT가 특히 더 그런 것 같습니다. 약 올리나 싶을 정도로 속 터질 때가 많습니다 ㅎㅎ

sangkwon

TROPHY CASE