RE: LeoThread 2026-04-20 20-44
You are viewing a single comment's thread:
This is true. I hope that they succeed because I am in big and stuck. I have every reason to see them succeed, but I feel that requires honest admonition when I feel it is needed.
0
0
0.000
Yes, I am in bigger than I should have been. I think the next post should describe in cautious language how they plan to move forward to manage the assets they have gathered from investors. Maybe a look at expected $ income, expected and realistic $ amount of buybacks.
They do have some revenue (market making I believe) and they have Leo assets and others, and prices are extremely low so buybacks are more impactful to remove future liability from the balance sheet.
I think if they can't put a plan in place or have no realistic expectation of a path forward as far as I understand the debt holders would get the distribution of the leostrategy assets as part of the liquidation of leostrategy.
so for example we would get some Leo and wait to see if that rose in price. but I think they are not intending to liquidate, I expect they want to find a path forward. Noone can force them to wind up and distribute the assets pro rata, as they have the keys to the account.
SURGE holders are the most senior debt holders so they have to get all the assets of Leostrategy in the case of a liquidation where the outstanding SURGE*$1 (liquidation preference) exceeds the assets of Leostrategy.
If there wasn't a long term realistic plan then they would be morally obligated to do a liquidation (transfer of tokens to the debt holders) of all the LEO and other assets they hold. This is not what I expect soon but if all else fails the bare minimum outcome we can expect.
I think for SURGE they should just turn the yield back on. The whole buyback idea is great in theory, but I doubt they will be able to materially keep the price up. Buybacks do ensure that @leostrategy will get more of the future yield (if they ever turn it back on), but this will be at current holders expense.
I am a bit more ambivalent about the RWA's and not sure exactly how to think about approaching those at this time. If it were me personally I would just buy them all back at the original HIVE price and go back to the drawing board. I doubt they will do this though.
Turn the yield on SURGE back on, buyback RWA's, and focus on making ACE a better stablecoin with profit opportunities for them.
If their current plan works to get the price back up, I will admit I was wrong, butI am skeptical at this time.
I don't think they have enough assets or revenue to pay the yield sustainably right now. For SURGE they owe 500,000 usd *15% = 75k per year and have assets of around 125k usd on their website - not sure when last calculated by them.
Likely correct. ☹️
Yeah and I guess if the $ Leo price recovers and /or revenue increases in $ terms then the collateral behind the debt could improve in the future.
Hope so!