425: Strive-Asset Entities Merger Advances, Bitcoin Strategy Set

Strive Enterprises' proposed business combination with Asset Entities Inc. is progressing, with a shareholder vote scheduled for September 9 to enable a $750 million PIPE for a perpetual Bitcoin strategy.

Summary

• Strive Enterprises, Inc. (Strive) is moving forward with its proposed business combination with Asset Entities Inc. (ASST), with the shareholder vote now live.
• The shareholder meeting for ASST's reverse merger with Strive is scheduled for September 9.
• 40% of the required 'yes' votes are already contractually secured, with an additional 10% needed from the remaining 60% of shareholders for the transaction to close.
• The business combination is on track to close by Autumn, as previously stated.
• Post-merger, Strive plans to unlock a $750 million PIPE (Private Investment in Public Equity) to acquire Bitcoin and initiate a perpetual Bitcoin strategy.
• Avik Roy, a prominent Bitcoin policy advisor and former Wall Street investor, will be joining Strive's board upon the company going public.
• Discussions included the Federal Reserve's recent dovish shift, removing the 2% average inflation target, and its prioritization of a liquid Treasury market and employment over inflation.
• The US government's 9.9% ownership stake in Intel, funded by the CHIPS and Science Act and a national security initiative, was analyzed, with skepticism regarding its success in fostering chip dominance.
• The long-term macro thesis suggests continued devaluation of the dollar, making perpetual Bitcoin-backed trades attractive.
• The growing political influence of the Bitcoin community and the potential for states to adopt Bitcoin as legal tender were highlighted as positive developments for the ecosystem.

Sentiment

Score: 8

Explanation: The sentiment is highly positive, driven by the imminent closing of a significant business combination, a substantial PIPE for Bitcoin acquisition, and a clear strategic roadmap for future growth and capital raises. The macro environment, particularly the Fed's dovish stance, is seen as favorable for Strive's Bitcoin-backed strategy. While market volatility and broader economic risks are acknowledged, the overall tone is confident and bullish on the company's prospects and the future of Bitcoin.

Positives

• The business combination vote is live and progressing, with the shareholder meeting set for September 9.
• 40% of the required 'yes' votes are already contractually secured, indicating a strong position to close the transaction.
• A $750 million PIPE is in place, ready to be deployed for Bitcoin acquisition post-merger.
• The combined entity is expected to have no debt, providing a strong financial foundation.
• Shelf eligibility is anticipated post-merger, allowing for future capital raises such as common equity issuance and a perpetual preferred IPO.
• The Federal Reserve's dovish shift is viewed as making the issuance of fixed income instruments, particularly Bitcoin-backed ones, more attractive.
• The United States is considered 'Bitcoin rich' due to significant holdings by its citizens and corporations (approximately 40% of all Bitcoin).
• The Bitcoin community's increasing political influence is steering both Democrats and Republicans to be less anti-Bitcoin, fostering a more favorable regulatory environment.
• The potential for states to make gold, silver, and possibly Bitcoin, legal tender offers an 'opt-out' for federalism and promotes financial freedom.

Negatives

• Historically, retail shareholders do not vote, requiring active solicitation to secure the remaining 10% of votes needed from the 60% not yet committed.
• Bitcoin's price has experienced a pullback, retesting July 7 levels around $109,250, though management views this as a buying opportunity.
• The Fed's dual/triple mandates are seen as conflicting, with a prioritization of the Treasury market and employment over inflation, potentially leading to asset bubbles.
• Skepticism exists regarding the success of the US government's 9.9% stake in Intel, with concerns that subsidies alone cannot guarantee chip dominance.
• The US faces a perpetual debt crisis, with interest payments on the debt now exceeding the defense budget, necessitating low interest rates which can fuel asset price inflation.
• The market is historically inaccurate at predicting the Fed's future actions on interest rates, introducing uncertainty.

Risks

• The proposed transaction may not close if the conditions to closing are not received or satisfied on a timely basis or at all, specifically if the remaining 10% of votes from the uncommitted 60% of shareholders are not secured.
• The anticipated benefits of the proposed transaction, including cost savings and strategic gains, may not be realized as expected due to changes in general economic and market conditions, interest and exchange rates, monetary policy, laws, regulations, and competition.
• The integration of Strive and ASST may be more difficult, time-consuming, or costly than anticipated.
• The proposed transaction may be more expensive or take longer to complete than expected due to unforeseen factors or events.
• Management's attention may be diverted from ongoing business operations and opportunities during the merger process.
• Potential adverse reactions from Strive's or ASST's customers or changes to business or employee relationships could arise from the announcement or completion of the proposed transaction.
• Changes in ASST's share price before closing could impact the transaction.
• Future US fiscal crises could potentially lead to government crackdowns on Bitcoin, although the growing entrenchment of Bitcoin in the economy is seen as a mitigating factor.
• Other international corporations face a higher likelihood of having their Bitcoin seized by governments compared to US corporations, due to the US's existing Bitcoin holdings among its citizens and corporations.

Future Outlook

Strive expects to successfully close its business combination with ASST by Autumn, enabling the deployment of a $750 million PIPE for Bitcoin acquisition and the launch of a perpetual Bitcoin strategy. The company anticipates achieving shelf eligibility post-merger, facilitating future capital raises through common equity issuance and perpetual preferred IPOs. The broader market outlook suggests continued dovish monetary policy from the Fed, making fixed income instruments more attractive. Bitcoin is expected to become increasingly entrenched in the financial system, with growing political influence and potential for state-level legal tender adoption, enhancing its resilience against future government intervention. The development of decentralized peer-to-peer exchanges for fiat-to-Bitcoin transactions is also seen as a crucial future development for Bitcoin's utility and resilience.

Management Comments

• Matt Cole: "We announced that our boat is live to go public."
• Matt Cole: "We're getting closer and closer to, you know, unlocking our $750 million PIPE, buying a bunch of Bitcoin and, you know, more importantly, starting a perpetual Bitcoin strategy."
• Matt Cole: "We are on track to get this closed by Autumn."
• Matt Cole: "40% of the vote is already contractually, you know, agreed to vote yes. And so for the remaining 60, we need 10 out of 60, 10% out of 610, out of 60, to get to yes. And if we do, we will close this transaction. So, you know, if you are a shareholder, vote, yes."
• Matt Cole: "We expect for there to be a shelf eligibility, which, you know, allows for things like common equity issuance, a perpetual preferred IPO, stuff like that."
• Matt Cole: "The Fed will play a backstop in the markets. And when that is the case, you want to be out there issuing, you know, these fixed income instruments."
• Matt Cole: "I'm just hoping it stays down here until we buy some Bitcoin."
• Avik Roy: "It's most exciting thing I'm doing... I'm going to be joining the board of Strive as it goes public in hopefully a couple of weeks."
• Avik Roy: "The market is betting that interest rates are going to continue to go down modestly in the US and around the world."
• Avik Roy: "What's most important... make Bitcoin more useful."

Industry Context

The discussion places Strive's merger within the broader context of Bitcoin Treasury companies, a growing segment focused on holding Bitcoin as a primary treasury asset. It also touches upon the evolving macroeconomic landscape, including Fed monetary policy shifts (dovish stance, prioritizing Treasury market stability over strict inflation targets) and their implications for asset prices and fixed income markets. The conversation also delves into the strategic importance of semiconductor manufacturing (Intel vs. TSMC) and the US government's intervention, drawing parallels and contrasts with the Bitcoin space regarding government intervention and asset seizure risks. The increasing political influence of the Bitcoin community and the potential for Bitcoin adoption at state levels are also key industry trends discussed.

Comparison to Industry Standards

• MicroStrategy is cited as the leading Bitcoin-backed credit issuer, offering 9-10% yield on perpetual preferred equity instruments, which Strive aims to emulate as the 'number two' player in the market.
• TSMC is highlighted as the clear winner in advanced semiconductor manufacturing, contrasting sharply with Intel's -44% total return over the last five years, despite significant government subsidies in China (~$250 billion) failing to achieve dominance.
• The US government's 9.9% stake in Intel is compared to historical S&L bailouts and the Asian financial crisis, where the Fed's approach was to clean up busts by injecting liquidity, a model that continues to influence current policy.
• The Federal Reserve's conservative approach to corporate debt ownership is contrasted with other central banks that have been more aggressive in wading into corporate debt.

Management Changes

Corporate Governance

Stakeholder Impact

• **Shareholders (ASST):** Urged to vote 'yes' on the merger, with 40% of votes already secured, indicating a high likelihood of success and potential for value creation through the combined entity's Bitcoin strategy.
• **Shareholders (Strive/Combined Entity):** Expected to benefit from the $750 million PIPE for Bitcoin acquisition, a perpetual Bitcoin strategy, and future capital raising opportunities (common equity, perpetual preferred IPO), enhancing long-term value.
• **Investment Professionals:** The Fed's dovish shift and the growth of Bitcoin Treasury companies present new investment opportunities, particularly in fixed income instruments tied to Bitcoin, offering attractive yields.
• **Bitcoin Community:** The growing political influence and efforts to foster Bitcoin adoption and utility are seen as crucial for long-term resilience against potential government crackdowns, benefiting all Bitcoin stakeholders.
• **Employees (Strive/ASST):** Potential for changes in business or employee relationships due to the merger, though not explicitly detailed as positive or negative, implies a period of integration and adjustment.

Next Steps

• Shareholders of ASST are urged to vote 'yes' on the business combination by September 9.
• Strive expects to close the transaction very quickly after the September 9 shareholder vote.
• Post-close, Strive will call the PIPE chairs and deploy the initial Bitcoin.
• Strive will begin its perpetual Bitcoin strategy.
• Strive expects to achieve shelf eligibility post-merger, enabling common equity issuance and a perpetual preferred IPO.
• Matt Cole will attend the Bitcoin Asia conference in the coming days.
• An unconference event is scheduled for September 17, with a kick-off event on September 16 at PUBKEY.

Key Dates

Recommendation

The filing presents a compelling case for a 'buy' recommendation. The imminent closing of the business combination between Strive and ASST, backed by a substantial $750 million PIPE for Bitcoin acquisition, positions the company for significant growth in the Bitcoin Treasury sector. The strategic appointment of Avik Roy to the board adds credibility and expertise. Furthermore, the analysis of the Federal Reserve's dovish monetary policy and the long-term macro thesis of dollar devaluation strongly support the perpetual Bitcoin strategy. While market volatility is acknowledged, it is framed as a buying opportunity. The company's expected shelf eligibility for future capital raises and the growing political entrenchment of Bitcoin further enhance its long-term prospects, making it an attractive investment.

Keywords

Strive Enterprises, Asset Entities, Business Combination, Merger, Bitcoin, Cryptocurrency, SEC Filing, Financial Markets, Federal Reserve, Monetary Policy, Corporate Governance, PIPE, Digital Assets, Blockchain, Investment, Intel, Semiconductors