RE: Where Does SURGE Yield Come From?

[leostrategy]

Part of the point of this post was to address some criticism from outsiders on "how can SURGE yield be sustainable?"

The yield for SURGE is going to be minuscule compared to fund inflows + appreciation of the LEO held on our balance sheet. Thus, the SURGE yield will always be secured while continuing to purchase more LEO. As our balance sheet expands (LPS increases * LEO Price increases) it creates even more opportunities for us to capture revenue and generate new capital to both:

1. buy more LEO
2. pay SURGE yield

There is no limit on SURGE yield though there are conversion rights for SURGE. We've modeled that most SURGE should be converted within the 1st 12 months (more than 50% of it) --- converted to LSTR, that is

Comments

[dankorox]

Thanks for the explanation!