Episode 12: Treasury Companies: Risks You Need to Understand

Understanding the Risks of Investing in Treasury Companies

In the latest episode of Old Men New Money, Douglas Borthwick delves into the various risks associated with investing in corporate treasury companies that are heavily involved in crypto assets. The episode covers seven major risk categories including asset price risk, NAV premium compression, dilution, debt leverage, regulatory issues, key person risk, and execution risk. Borthwick emphasizes the importance of understanding and managing these risks, especially in volatile market conditions, and provides guidance on position sizing, monitoring metrics, and establishing clear exit rules. He also cautions against treating these investments as conservative or core holdings, recommending them only for those with high risk tolerance and speculative capital.

00:00 Introduction to Corporate Treasury Strategies

00:45 Understanding Major Risk Categories

02:37 Asset Price Risk Explained

04:14 NAV Premium Compression

05:46 Dilution Risks

06:56 Debt and Leverage Risks

08:14 Regulatory and Legal Risks

09:36 Key Person Risk

10:46 Execution Risk

12:20 Competition and Technological Disruption

15:23 Managing Risks and Position Sizing

16:30 Who Should and Shouldn't Invest

18:09 Final Thoughts and Next Module Preview

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