Q2 2021 Earnings Call Transcript

Published: 22 Jan 2021

Operator:

Good day. Welcome to the FRMO Quarterly Conference Call. As a reminder, today's call is being recorded. At this time, I would like to turn the conference over to Ms. Therese Byars. Please go ahead, ma'am.
Therese Byars:

Thank you, Connor. Good afternoon, everyone. This is Therese Byars speaking, and I'm the Corporate Secretary of FRMO Corp. Thank you for joining us on this call this afternoon. The statements made on this call apply only as of today. The information on this call should not be construed to be a recommendation to purchase or sell any particular security or investment fund. The opinions referenced on this call today are not intended to be a forecast of future events or a guarantee of future results. It should not be assumed that any of the security transactions referenced today have been or will prove to be profitable or that future investment decisions will be profitable or will equal or exceed the past performance of the investments. For additional information, you may visit the FRMO Corp. Web site at www.frmocorp.com.
Murray Stahl:

Okay. Well, thank you Therese, and thank you, for everyone for joining us. Now I should tell you at the outset, I think we have the record number of questions. I haven't even seen the questions, they're going to be read to me, then we have the record number of questions. So to get through as many as I possibly can, I hope I can get through all of them. I'm going to abbreviate some of the prepared remarks with the trusting that a lot of it'll be in the questions. And I'll try to work with what have been prepared remarks into the questions. So as always, I will start with the balance sheet. And as you can see our financial position, it'd be a lot more meaningful if it was November 30 to August 31. On the financial statement, I guess, probably properly the way it's done. It's November 30 to May 31. And it looks like this is the record shareholders equity, If I'm wrong, I can't be wrong by much. But I looked before, I think the record shows equity we ever had. And the things that we are predicting to happen, have yet to happen and may never happen. So as you probably know, we've repeated endless times, the investments we're making are those that would benefit from inflation, the biggest investment we have, it's actually not in cryptocurrency, although that would benefit inflation in my view, because investment we have in a singular sense is the investment in HK hard assets within that the biggest investment is Texas Pacific Land Trust. And within it when I really talk about there are other investments that we're making. So we intend to keep building up HK hard assets. So what's the common theme?
Steve Bergman:

Sure, I will add a plenty. I'm preparing for our quarterly review/webinar tomorrow. And I was looking at some of the very same things you are because we're having the same discussions, it's the same place where we work. So just to add to your observations about index concentration. People get this impression, we don't like technologies, I ignore the technology. I looked at and looked at the index in a little different way. So in the S&P 500, as looked at the top heaviness and it turns out that, out of the 500 companies, just the two top ranking companies, they happen to be Apple and Microsoft. They have a combined weighting in the S&P 500, a little over 11% and the bottom 250 companies, 50% of the S&P 500, by number of names account for about a little over 11%. So in that sense with respect to the ideas of -- the animating idea behind indexation, which is set as broad diversification to expose you positively to all the various aspects of an economy and to protect you from the vagaries of risks like changes in regulations or taxes or interest rates or whatever. So these two top companies implicitly, in the sense purport to represent the exposure to the economy that the bottom 250 companies do, we thought that was interesting.
Murray Stahl:

Okay. Well, thank you, Steve. And Therese, if you would be kind enough, see a bit of questions, I try to best answer everything.
A - Therese Byars:

Sure. Yes. Steve's right. That is about half of them are on crypto. I'm going to try to group some of them together but so give me some of them are duplicated somewhat. So the first one would be, would you share your current thoughts regarding the cryptocurrency mining business and its future, which maybe I should also read the next one. There's been much talk of cryptocurrency blockchain and specifically the belief that blockchain technology will be utilized on all exchanges, commodities, real estate, oil, gas, mining, farming, precious metals, et cetera. Any thoughts on creating a business to provide these blockchain services? I know Universa is working with a large sugar refinery and others. I would suggest Barrick or South African miners are making an effort purely to provide, prove their gold is not coming from irresponsible unethical mining practices. This could be utilized in timber as well, perhaps just investing venture capital in existing companies that provides these services would be of interest. So that would be -- what are your thoughts on the cryptocurrency mining? I'm not sure they actually put the other but I'll let you go.
Murry Stahl:

Okay. Well, whatever I'll do both. So mining first. So it's important to understand that, at the moment, the mining business is incredibly robust, has a very, very high return on capital, that it's not going to last no matter what the price of bitcoin does go up or down. Here's why it's not going to last because there's something called having. The having will occur in about 1200 days. What is the having? The having is that every four years, the compensation you get for mining Bitcoin, I should say parenthetically, that when we say mining Bitcoin, that's the term everyone uses, what they really should say, it's a less elegant term, but it's the truth. You're validating transactions, that's why you get the reward. Anyway, about 1200 days, the rewards building begin to be cut in half. So if Bitcoin was the exact same price, your revenues going down by 50%, the costs are going to be basically the same. There may be some efficiencies that people figure out, we over the years, we figured out ways to make the miners much more energy efficient. But we're getting to the point where the laws of physics, we're running into them and how much more efficient they can be made. Although I would imagine there's probably improvements. The only way the profitability is going to remain what it is, I don't think it will remain what it is, is the price of Bitcoins got to be a lot higher and that can happen. In the paper I wrote, I lay out, I'll try to go into a little bit, the economics of it, that basically, when there are more people mining, your share to block reward even before they are having is less and less and less. So what happens is, as a miner, you have a choice, you can put money into the machines, or you can put money if you want, because the object mining is only to create Bitcoin. You can create Bitcoin. So we can buy Bitcoin. So the mining gets less profitable, doesn't make sense to put money in the machines, you start buying Bitcoin. If you don't replace the machines, the number of players is reduced. And your machines at least the ones they are operating get a higher market share, your profitability goes up and that's one part of the cyclicality of mining. And it's just part of business. You have to live with it. But unlike a normal cyclical business, it never really goes negative. Why it's not going negative because when negative, you couldn't have a blockchain. The blockchain exists not because of some technology, it's because there are multitudes of machines that are simultaneously validating the transactions and that's why it can be trusted. If it becomes centralized, it can no longer be trusted, so you don't really have a cryptocurrency market the way you had before. So anyway, I write about this, I won't go into it too much because , but basically, the least efficient people set a floor on Bitcoin mining, they got to be a day -- you got to get a rate of return to them, they don't get a rate of return, they're not going to do it. The most efficient people just get a higher rate of return. It's the exact opposite, when you have no business with the most efficient person happens to be the leader and sets the rate of return sufficiently robust and make a lot of money. But nobody else can be as efficient and force them out of the market doesn't happen in the world of cryptocurrency. As I noticed very abbreviated, that hope that is adequate for thoughts about the mining. And now with this part two of the question Therese, just to repeat, so everyone doesn't lose track of what it was, just the general the thrust of it.
Therese Byars:

I think it was about how the cryptocurrency blockchain could be utilized on exchanges for commodities, real estate, oil, gas mining, et cetera, even so to prove that, let's say your gold is not from irresponsible or unethical mining practices, and also perhaps with timber?
Murray Stahl:

Right, there's going to be blood, the reason that there are literally 1000s of cryptocurrencies, is because there are literally 1000s of possible use cases for cryptocurrencies, and therefore, there's going to be 1000s, many 1000s. I personally believe it's in the 10s, maybe 100s of 1000s of blockchains, that every SKU that can be made, hopefully is going to have its own blockchain. So every Stock Exchange, every type of stock, hopefully is going to have its own blockchain, voting systems. searches on search engines have their own blockchain. Why you do have a blockchain? Because the data of your searches, is exact whatever you're searching for, is actually very valuable to advertisers. But you don't control that at the moment. The lawyers, whoever collects the data, controls it, and therefore gets the revenue from it. And ultimately, what's going to happen is, you will control it, because your data is going to be in a blockchain, you will decide when to release it, and to whom to release it, and what advertising willing to accept. Therefore, the compensation for advertising is going to go to the people who buy instead of the people who collect the data, it's a revolution. And that's why I point up this issue of technology in the S&P 500. It's simply assumed, then a handful of companies will continue to collect the data, and ever more data, systemically organized and collect ever higher fees on it, because the amount of data is ever accumulating. I don't think that's going to happen. The blockchain revolution is going to store the data to the people to whom it actually belongs. And the problem from an indexation point of view, we don't go back to that is, that indexation, theoretically is a holistic solution to the investment problem. You basically have everything. So what does it matter? Is Walmart better than Amazon or Amazon's better than Walmart, they have it all, except that now the companies will be competing with blockchains. They're not companies, they are just blockchains. They're open source code that belongs to the world, so you will be as an enterprise competing with something that is not a corporation, it doesn't have a profit objective. And you could easily get displaced, but you can't put the blockchains in the index, and therefore the index, not the holistic solution. That's what I believe is ultimately going to happen. And we'll see how long it that takes. Anyway, hope that answers the question.
Therese Byars:

Yes. Then I have at least three that are about valuation, so I'll just read them in order. talks about other investments and that's in quotes. “Can you provide an any insight into how to value the return on equity in those investments in cryptocurrency mining entities at the present time? And what are the near-term business plans for the mining entities is creating other new cryptocurrency mining entities in active consideration?”
Murray Stahl:

Well, yes, I would like to at some point, do something in the public domain, if it were possible in cryptocurrency mining. I would like to combine it however, with other types of businesses, maybe the building and repairing machines maybe create a pool. There are a lot of possibilities. So we've only just begun. The reason is because nobody and I mean, nobody has tremendous experience in this business, we ourselves have five plus years of experience. In the world of business, without a lot of experience, especially in a business that's constantly changing. So we'd like to be do something in the public domain, we'd like to be in a position to raise more capital at some point for some type of enterprise. That's mining plus some other things, in the world of mining, that we've developed an expertise in that as far as it goes, I can't tell you about anything. I don't have anything to share right now, that's why I'm keeping anything for you. It's just things that we're considering but we haven't really done much. So that's where we stand on that subject.
Therese Byars:

Okay. So another about valuation, how would Mr. Stahl, calculate the intrinsic or fair value price of FRMO? I find it challenging. For example, the book value of its ownership in digital currency group is $76,261. And the book value of cryptocurrency mining entities in November is listed as 246,824. So I guess it's just kind of how a method for finding fair value?
Murray Stahl:

Okay. Well, there's a couple of publicly traded companies that are involved in cryptocurrency mining. So I can tell you that they basically value their equipment, at least at the moment. And depending on the company, it's something like three or four times the cost of the equipment. I personally think that's bizarre. But anyway, but that's the way the market values it at the moment. So you can use you can use that, if you will, I don't think I'm going to be using that. But I don't know how much help it is to you but that that's how the market actually values it. With regard to digital currency group, there's some things you can know that. So, it's got 20 odd billion dollars of assets under management, it's in cryptocurrency is a generalization, it charges 2% management fee, you can pair it to revenues, that obviously doesn't cost anything close to that number to custody of the assets that actively managed, you'll have portfolio managers and such. There's a cryptocurrency they say exchange, it's really a brokerage, there will be things that in cryptocurrency exchanges are really brokerage businesses, but they use the terminology exchange. Anyway, you'll have a pretty good idea how to value that in the metrics because Queen base is coming public in not too distant future and you'll be able to use that as a metric. Coming back to the asset management side. There's also venture capital side and there is a venture capital investment worth if they were to come public. When this -- day you'll get a better idea in the upcoming months, because things are coming public. So for example, BPC impact acquisition, which is a spec is going to come back, back you will recall is the cryptocurrency custody/processing business of the Intercontinental Exchange. And you can get a sense for what the price of book value ratio is going to be, it's going to be very, very high. So chances are any viable business in cryptocurrency is going to trade it many times book value, at least in the current environment. Coming back to the asset management business, see the complexity of it. I don't want to tell you exactly what the number is because there's an element of subjectivity in it. The question is, what multiple or what relation of market value to AUM does one apply? If the assets are in a trust. So it's not like conventional asset management, where the assets come and the assets go. In the case of the trust, it's essentially permanent capital. So therefore, the revenue horizon is really far out even if the assets don't decline in value, and you can forecast for much longer. Another way of saying this can where you would apply, would be a very low discount rate, because the stability of the assets although not their market value, you might want to raise the discount rate because the market value is so volatile, but I think over time, the market value is going up. Anyway, you'd apply a certain market value to AUM to it, it would be a very -- by investment management standards it would be very high. And that's the way you would value it, at least that's the way I do it. But as far as number goes, there's this element of subjectivity. And we will have to use our own number and our own discount rate and it's a question of what you think the risk is, so it's that as far as I can go with that question. I hope it's a satisfactory answer.
Therese Byars:

Similar would be the following. Please explain the real value of each of the following investments, which showed declines or no change because it's being carried at cost, but probably, our worth is substantially more. And the list is horizon kinetics, cryptocurrency mining, LLC, one and two, Horatio Mining, which was sold to Winland in an exchange to Winland shares. There is a question later on in the Winland section about that. HK Tech and digital currency group. So those are all mining, question of value…
Murray Stahl:

Okay. Digital currency is not a mining business. I think there's a little bit of mining business in digital currency, but in its surrounding area really, it's not significant. Anyway, with mining businesses, if you just want a multiple and look at something, there are plenty of publicly traded companies and we have a big interest in one that's Winland trade to certain multiple of book value. And Winland also owns cryptocurrency assets, and owns mining equipment that owns the sensor business. So you have to take that into account. But at least as far as the stock market is concerned, the market uses price to book ratio, price to book ratio is actually fairly high. It's not uncommon to see four times book value, they may think four times book value is a preposterous number. Well, if you do, you really have to rethink that. And because the S&P believe it or not trades at four times book value. You could say that, if you believe the cryptocurrency business is going to grow faster than the S&P and some would think it would, maybe the cryptocurrency business is entitled to a higher price to book ratio in the S&P 500. Or alternatively, you could say the price to book multiple of the S&P 500 is way too high and you could solve the problem that way. So I think that's where it is. Anyway, we sold Horatio to Winland. And we sold it for stock and when we did that transaction, give or take a few pennies, we sold Horatio Mining at book value. And we got shares of Winland, it was kind of book value. I don't want to say was exactly book value. It was very, very close to book value. And that was at the beginning of the summer of 2022. It shows you how fast the market changes its point of view. But in the early summer of 2020, the market was another name, was just crypto, it has its moods and that was the mood then. This is the mood now. It's everchanging. So I don't think anybody can find a fixed guidepost of the standard valuation. I hope that's adequate. I know you'd like a fixed guidepost, but unfortunately in the world of crypto, there is no fixed guidepost.
Therese Byars:

Okay. Mention was made in the October 14, 2020 earnings call of plans to build cryptocurrency mining machines. I know you talked about this in your remarks. Is this still an ongoing endeavor? If so, what progress has been made and has more money than invested in the enterprise in this quarter? Is that far more interested in this activity as part of an ownership in a separate corporate entity or as a business entirely within FRMO? That's it.
Murray Stahl:

Okay. To begin with, we own a piece of a business called Hash Master. This Hash Master who did the work. But the machines were owned by Hash Master just we acted as if we were a client, and we just wanted as an experiment to build some machines. So we basically acquired some parts. And the objective was to see we're buying a collection of parts, when to see how many machines we could make from that collection of parts. And then, we'll run successfully meaning they would run at or about the stated hash rates. And we ended up creating 15 of them. The total investment, I'm going to be off by a little bit, we didn't risk a lot of money. As I recall, and maybe $100 off. Anyway, we invested something like $2,700. And maybe there's really $2,800, I don't remember. But I seem to remember 2,700. So forgive me for being a little bit inaccurate but we ended up getting 15 machines, as the parts. So 15 machines, it was $2,800, it was $186 a machine. So that's pretty darn good. Trouble is that, if you want to do it at this very moment, it will cost a lot more because the parts are expensive, we're using the parts to repair other people's machines. We just make more money doing it that way. But all you need is a few days, maybe a week of negative cryptocurrency returns. And believe me, you'll buy all the parts you need and you'll make machines. We would like to eventually make a big inventory of machines. If we make a big enough inventory, if we could actually pull it off, we did as an experiment. If this trend was successful beyond my wildest imagination, I thought it'd be a lot worse than that but it was successful. And the first opportunity we're going to repeat it. And if we can do enough of them, we are going to trade a subsidiary, hopefully we call something like machines, and we'll do something with it. It'll be a real business. At the moment, just had to be disciplined. You can't risk a lot of money when the parts are expensive. But there's no question, they can get cheaper, because I alluded to earlier, where every day we get closer and closer to having those parts are going to be worth less. And eventually in don't find it valuable to repair their machines because the labor is too expensive. We were already paying for labor. There's no marginal cost for labor, that gives us an advantage. We just have to pick our moment. So it's in generalization, when the market is robust, we'll fix other people's machines. When the market is not robust, there'll be peers , when market is not robust, we'll build around machines. And that's where it's going to go. Next question.
Therese Byars:

Okay. Some upside potential noted previously was Bitcoin could be equivalent to the gold supply or even the U.S. dollar with the downside that it could go to zero. With Bitcoin developing along the lines that had outlined an institutional investor acceptance evolving, how has the upside to downside ratio changed?
Murray Stahl:

Okay. Well to begin with the upside. You could argue, well, I don't argue that bitcoin is going to be worst with the value of the gold supply. And the reason for that is, what is the gold supply? Are you saying the amount of bullion that's available? Or is it all the gold that's ever been mined? Does one include the jewelry, because when include the gold at artwork, museums and so forth? Does one include the gold in the central banks? So it's very hard -- you have to comprehend a number and it's very hard to choose number, a better number would be. And two, the trouble with it is, you can't just use the M2, the money supply of the United States dollar. You have to use the M2 of the planet because that's really the M2. So if you look at the M2 of the planet, it's a very big number. But is it adequate? Because not all Bitcoin is in circulation basically M2 measures the amount of money it's considered to be in circulation, but we have something called M3, which considers large time deposits. So the question, it's a theoretical question, you could debate the answer. Does one add in big holdings of Bitcoin that's on the blockchain, we can see it but that basically never trades. So should we be using M3? Or should we reduce the amount of Bitcoin outstanding by the amount of these big deposits we never trade? And how about bitrot which is the number of people who have lost their private key, the Bitcoin actually exists, but it's not accessible, so what is the amount of Bitcoin. And then there going to be other successful cryptocurrencies? They may not be used as a form of money in the conventional sense of the word, but they may be used as something else. And then, the last complexified point is government bonds, using native Treasury. For a moment, we all know how much is outstanding and treasuries a very big number and British gilts and hay and bonds, whatever. That they're a form of money in the sense that they can always be hypothecated. Who is getting money out of it? So you can take a million dollars in treasuries. And you can borrow a lot of money against it, especially if you want to buy more treasuries, if you're buying treasuries, you might be able to leverage them 10 times. So is that clear how big numbers is, except it's a very, very, very big number because you are taking all the M2 of the world, and all the government bonds in the world, if that were your target, and it's constantly it's increasing every hour, and every day. I would say the number would be something like $300 trillion. So Bitcoin was two thirds of that market. Bitcoins, remember number of currency growing Bitcoin would be a $200 trillion market cap, except we'd be bigger than that. Because you have to allow for bitrot and the stuff size and circulating, ignoring that it would be a $200 trillion market cap in relation to maybe a $597 billion, $600 billion market cap. And by the time they got to 200 trillion, which is a big increase in value, that number is going to increase a lot because all nations or world keep increasing the amount of money in circulation and keep increasing the amount of bonds that they're issuing. The upside is, it's really tremendous. And I believe it's going to get there. And then you could even say, it shouldn't be parity, it should be a premium to that. How much your premium you can debate. Why should it be a premium, because the inflation rate in all the Fiat assets is x, the inflation rate in Bitcoin is a fraction of that, it's going lower, every 10 minutes, goes lower by around the air, it goes lower every 10 minutes. And you know exactly what's going to be, there's no uncertainty. You could even argue for a premium, a big premium, there is the return, the return potential is quite extraordinary. If you're using $300 trillion I alluded to before, let's just do that just to see what it would be. So $300 trillion, remember, that's a moving target, it goes up every day. And let's say the current market capitalization 597 billion, the coefficient expansion would be 502 times in a year, it's 502 times your money, except as much more because that number 300 trillion is constantly growing. So it's the highest return thing you can possibly, at least that I can possibly see. And then, that's not the end of it because if it turns out, the assertion made earlier is correct. At the various blockchains are going to maybe not intentionally, but ultimately compete with the technology companies, they're not just investments, they are disruptors. They can disrupt the entire S&P 500 in ways that are just quite inconceivable right now. So people have to buy them, just those hedges, people really believe in them, a lot is possible, a lot. I believe it's going to happen.
Therese Byars:

Here's one -- probably had the short answer. What did the Horatio assets consist of that was sold to Winland for?
Murray Stahl:

There were some mining machines. There were some Bitcoin and some other currencies like Litecoin that we had mined, they were in effect mint coins, there was a little cash in there not a lot, some cash in there. That's been sold. We did the traded book value. We did the traded book value with Winland in a way you could say was an experiment. Once we did, then with the prior mining transaction. The idea is, once we turn Winland into at least in large measure, a mining company issues, we value that book and what was the market and the value add, the market value as a big multiple of books. I think it's about four times book now. That's what ended up happening.
Therese Byars:

Okay. All right. And just on December 11, Bitcoin was 18,000. And you were here to say you expected it to become worth 2000 or 4000 times more, you did not say when. By the way that was an interesting point in saying it is not going up rather, the dollar is falling. So I guess that's just more of a statement. Then Quinn proceeded to go on a rapid tear to 40,000 in less than a month, reached on December 8 and no coincidence, I imagine FRMO, which was $9.49 on December 8, went to a close of $14.35 on January 14. Here we are December, Murrysville, January 21 and Bitcoin has dropped to about 31,000 as I write this question this morning and FRMO to $10.11 a share. Two big drops from their heights, though a lot of -- from a month ago. What do you attribute all this commotion? In other words, volatility in each, if you have any idea?
Murray Stahl:

Yes. Let's begin with this. There's some obvious things and not obvious things. The obvious thing is, when you get a move of that magnitude, there are always going to be people who are going to take the position that well, even though Murrysville, wherever they referring to, things can be much higher, it might not be much higher in next couple of months. So when I take my profit now, either it's going to be lower and I'll buy back in or maybe won't be lower would be the same price and I'll buy back in again. And there's nothing wrong with that, that that's normal that people do that all the time. So that's one reason. The second reason is, the buying from the institutions is going to be gradual, not going to be a mad rush in. So, the price gets to be, let's say it's 40,000, the typical institution that was looking to invest in it is going to reduce its purchasing, perhaps to zero and see what happens, in other words, they're not going to put 100s of millions of dollars at a time into an asset that's appreciating that rapidly. So you're going to lose, at least in the short run a fair amount of buying support. And then, holders are going to see that and that will prompt them to sell. And then, we'll get to a level whatever that level happens to be, perhaps will be 31,000 or perhaps will be some other number, where institutions will gradually recommence their purchasing. Why am I confident? The institution is going to recommence their purchasing because a very big part of their assets are conventional bonds. So what can you say about conventional bonds, was an ETF, the aggregate bond ETF, which is the biggest bond ETF, there is, and I just was looking at it today. So I remember the numbers, the yield to maturity of the bond ETF, which is basically the bond market, it's 1.09%. That's the rate of return. And that's the rate of return you get, if rates don't go up. If rates do go up and will go up by three basis points, we will go up by 300 basis points or some other number, I don't have the slightest idea. But if it did, whatever number you want to use as an input, given the convexity of that portfolio is going to make it a lower return. So your best case return is 1.09% every year, forever, unless rates go up. And if they go up, depending on how much they go up, you get a lower return. Now since we all can agree whatever outlook for inflation is, that's lower the inflation rate. You're dead money has been the base that maybe some people believe the inflation rate is going to be two or some number like two and then it's only getting the base by 1% a year. Maybe some people believe like I do the inflation rate is higher and is going to go higher, well, then you can take that as your forecast or an event. That's an unsustainable situation. So the portfolio, those bond portfolios which number in the 10s of trillions of dollars, the entire size of the bond market, it's America is $82 trillion, such is the American bond markets, $82 trillion plus and growing. So you have to do something to protect it. Now a 1% position as an offset in crypto, let's just say was Bitcoin, 1% position and by the way, that number 82 trillion is growing every day by many billions of dollars. Many event 1% of a 82 trillion is $820 billion. That's considerably more than whole market capitalization of Bitcoin, taken as if for liquid security. So you can see 1% position meaning, theoretically, the collective bond market could say, you know what, I'm going to take my this year's bond coupon 1% and invest in Bitcoin to create a hedge against the debasement of the currency. And you wouldn't be able to buy all the Bitcoin anyway. Just not doable. And who used to say the appropriate hedge is 1%, what if it were two, and I'm just including America, you have to include all the other countries in the world. America, in economic terms, is something like 16% of the world. To assume, take that number from America, multiply by roughly 6, take 1% percent of that number, you can see the potential buying, assuming every Bitcoin is available for sale, which clearly isn't. And you get the idea. And if the number is really 2% or even 3%. And we only talk about institutions. We didn't talk about individuals. We didn't talk about real estate. What about triple net lease real estate, which in theory is all asset, the reality is structured like a bond portfolio. There's a lot of triple net real estate around. Anyway, you see what I'm driving at?
Therese Byars:

Okay. Then, further same questionnaire. I've heard you said that 65% of Bitcoin wallet have not had any coins, enter or leave for years. What do you know about this? And what do you know about the amount of Bitcoins involved in 65%, of how many wallets? Do these amount to, for example, there are how many total and how many new ones opening today or month or whatever period you want?
Murray Stahl:

Well, there's a website called blockchain.info. And rather than do from memory, if you go into website blockchain.info, they have precise statistics on how many transactions there are, how many wallets there are with the average amount of money in them. There's all sorts of statistics there. So you can get all that, you can get all out there. But a lot of people, it's true, open a wallet, and they just want to experiment with it. They'll put a satoshi in there, which is a tiny fraction of a Bitcoin. But I don't think it's true that there's no money in there. I think people open them as experiments and there's some de minimis amount of money there. Now, you might say, what's the difference? Well, people experimented with it, and a lot of people find it just too cumbersome to which is true for the average person. It just isn't an easy way of conveying Bitcoin either buy or sell on their own. It's not for everyone. That's going to change in next year, but in a moment that's where we are. So people try it, it becomes I guess, frequently beyond their capacities or may perhaps they don't want to challenge their capacities or test their capacities. But that's true. I don't remember the exact number but you can get the exact figure of blockchain.info.
Therese Byars:

Okay. Incidentally, new Bitcoins mine daily are dwindling in number and are now what 900. So the supply of bitcoins versus increasing demand must be getting more and more out of balance. And hence, is it correct to say that the very recent increase in bitcoin price is understandable, but the most recent price, thus must be something likely to be very short lived? That's the question.
Murray Stahl:

Well, like I said before -- as I said before, the current market capitalization of all of Bitcoin is something like $597 billion, or thereabouts. And in relation to bond market, it doesn't even rise to around the year. So basically, you have a $82 billion of assets in United States, excuse me $82 trillion of assets in United States, 82 trillion versus $597 billion, 82 trillion, not even around the year. So to be equal 1%, let's say 1% we regard that is not a rounding error, or some people would say, at 82 trillion, 1% is still around the year. You got to appreciate a lot just to get to 1%. We're nowhere there not even close to there. As I said most of the bitcoins not even available for sale. So we're not even in the first inning of this experience. The various nations of the world, they have an alternative. They are riddled with debt. They can't stop issuing debt, they stopped issuing debt, the world economy come to a screeching halt, within days can't stop. There are too many jobs, too many livelihoods, too many enterprises that are dependent upon the continued increase of debt. So these pieces of paper in our hard assets that people consider to be wealth. There's only so much wealth in the society just keep issuing these pieces of paper without debasing them. That's the whole idea behind Bitcoin. And so you read the original book, The Denationalization of Money by Friedrich Hayek written in 1977 basically, it's all about and the inflationary world at least in terms of debt issuance, that he observed in 1977. It's literally nothing in comparison to what's happening right this second, it's literally nothing. It's irrelevant. So at some point, people lose confidence. Are we there yet? I don't have the slightest idea. I just tell you this, the bond market, the last six months, at least America has had a slightly and slightly negative rate, mostly negative rate of return, obviously negative, make of it what you will. If people look at historical rates of return in the various bond indexes and they don't understand that -- it's not an interest rate, that you're putting money into an ACS Treasury, and they pay you a certain rate of interest, return of standard rate of interest. It's historical appreciation because rates go down bonds appreciate, it's an inverse relationship. The moment there's no room for rates going down, so people don't see it yet. But before very long, I believe they will see it. And it will be interesting to see how people react, I don't suspect they're going to be very pleased, the rate of return. Once they understand, as they ultimately will, that bonds can decline in value, and they do decline in value. Having experienced that really since 1980. This is 2021, 40 years, somebody could have been 20 years old in 1980 and now they're 60 never experienced a bear market in bonds, they don't realize that there even can be and there will be, I think it's going to happen. And then, human behavior will change, may happen very soon, may already started to have happened. We'll see how it does. Okay, what else, can we answer?
Therese Byars:

Okay, here's the next question. How can the SEC ever allow a Bitcoin ETF given their limited supply “Hoarders plus Bitrot leaving so little which ETFs can possibly purchase.” How will the SEC say okay to creation of ETFs given the supply situation, in your opinion?
Murray Stahl:

Well, I personally think it's inevitable. The CFTC has already said okay to cash delivery Bitcoin features, as already said okay, the physical delivery features. Yes, you see, incidentally, has said okay, it's in Russell 2000 ETF. So take the bottom three or 400 names of the Russell 2000, look at that liquidity. And it's not very good and there's even a micro cap index in the United States. Companies have virtually no liquidity. The issue is not liquidity, issue is transparency. So right now, there are transactions going on and all the things the SEC would like to guard against like spoofing or things of that type. They're not happening on registered regulated exchanges. So sound highly clear that the price you're seeing is the real price. So the first order of business if you want to create Bitcoin ETFs has to be to have regulated, registered well ordered exchanges with trading rules. That's coming, going to happen. And if it doesn't happen in America, I believe it will. It's going to happen somewhere else. It's going to happen in Switzerland. It's going to happen somewhere matter of fact it's on the verge of happening in Switzerland. It's going to happen in other countries as well. It's just a matter of time. And the exchanges, there's a lot of software and systems and thought and rulemaking has to go into doing this thing. And it takes some period of time but a lot of the work is done. It's going to happen. But basically, if it's the policy, I don't mean policy every government to debase currencies, maybe they can't do any different. Well, people are going to look for a solution. No one's going to tolerate taking debased money as a payment, once they come to the conclusion that they're really being debased. It's no accident at the Bitcoin surge, which you could say started in the summer of -- maybe this late summer of 2020. That corresponds precisely with the inception of a modestly negative and it's only modestly negative, mildly negative bond market rate of return. Just a matter of time to accelerate, it's just a matter of time, maybe weeks, maybe even days, suspect days, but it's possible, really possible. Remember, when you look at Bitcoin, what you have to do, at least intellectually, take the chart, turn it upside down, you're not looking at an asset that's appreciating, you're looking at $1 that's depreciating. So the question is, how many Bitcoin can $1 buy and to keep buying less and less, less meaning if you want a Bitcoin holder to part with a Bitcoin, they want more of your dollars to encourage them to park with. So the majority of people think that Bitcoin people are rational. The Bitcoin people and cryptocurrency people in general, think the Fiat buyers are rational, because their money is being debased. They're willing to invest their money in a bond that clearly provides a negative rate of return. And there are bonds that actually have negative interest rates in the world, quite a few of them. So which, so who's crazier? That's the issue.
Therese Byars:

Okay. How are the cryptocurrency coins valued on the balance sheet? And what are the mining economics as of trading as of today for FRMO and Winland? Have you talked about this before?
Murray Stahl:

Okay. So how are they valued? They're valued at market on the data, we value them. And we take this opportunity there is some numbers they normally read the beginning give you what we will be owners of these various cryptocurrencies. And I'm going to read these things right now. Just a cryptocurrency then bound to get a question about energy. I'll read you the PPL numbers anyway. We own 561,141 proportionally mostly through via the private investment funds of GBCC Bitcoin Investment Trust. We own 92 shares or 92 coins Bitcoin cash, this is through the funds. We own 1565 shares of the Ethereum classic Investment Trust. We own 23,636 shares of the Bitcoin cash Investment Trust, which is restricted at the moment, but soon will not be, we own 1374 shares of the same Bitcoin Investment Trust, which is not restricted. We own foreign 54 shares of XRP otherwise known as ripple investment trust, which is, that one is actually closing, which is interesting story if we could get a question on that. We own 400,381 shares of Litecoin investment trust to mention parenthetically, you won't believe this, but I tell you, it's true. Although you'll think I'm making it up likely investment trusts least as of yesterday, traded ours is restricted, so we can't trade, we evaluated NAV, but it traded at no 20% Premium 20 times in net asset value, 20 times, if you can believe that. You'll think I'm making up and I'm really not. We own 549 shares of the Zcash Investment Trust and we own 210 shares of 210 coins of Bitcoin gold through the partnerships coincide directly all these we basically -- all these we mined with the exception of, we own directly, not through partnerships 7644 shares of Bitcoin Investment Trust, GBDC as far as queens go, these are all things we mine, rounded to the nearest whole number. We own 78 Bitcoin, we own 628 Litecoin, we own 35 Ethereum, we own 662 Ethereum Classic, we own 54 Zcash all mined and Winland owns 10.15 Bitcoin all mined, and also owns an investment in the Mt Gox bankruptcy claims which are ultimately payable in Bitcoin, we own roughly 8% of Winland. So that's the Bitcoin figures. Now let's repeat a question. So everybody will know what the question was, because there were a lot of figures in there, and everyone is going to forget it. So just, if you wouldn't mind repeating it Therese.
Therese Byars:

Sure. Sure. How are the cryptocurrency coins valued on the balance sheet? And what are the mining economics as of today for FRMO at Winland?
Murray Stahl:

Okay. So as I said, the coins are valued, whatever the market value is on that day. So that's, that's the protocol. And as far as the mining economics, they're very, very robust. So maybe the best way to express it is relative to expenses, the revenue, maybe with the recent decline, that won't be as good, but the revenue was something like three times the expenses. In terms of profit margin, you had something like multi 100% profit margin, which is unheard of. And as I said earlier, it's just not sustainable. Not because desired profit margin all as part of it, it's not sustainable, because ultimately, you're going to get to a halving and the economics are going to change for the worse. But if there are less people mining, the economics change for the better, or if you're less people mining to give them incentive, if people don't want to go into mining and they buy coins, the mere possibility of people taking their cash flow, and buying coins, as opposed to machines that'll serve to drive the price up. That's the mechanism. That's why there's certain amount of cyclicality I don't expect the very robust margins to last.
Therese Byars:

Okay. Would you shed some light on the changing nature of the other investments? In other words, the mining LLCs, their value appears to be reducing However, one note seemingly correlated increase in the crypto mining assets line in non-current assets. Are the other investments being moved to fully owned FRMO owned assets?
Murray Stahl:

No. What's happening is, when you buy machines, it appreciating constantly. So we used to use a three year depreciation rate. Now we use the two-year depreciation rate. Now, one of the interesting things about that is, so we have a number of miners, these are S9 miners. They're all fully depreciate. So theoretically, they have no value. And believe it or not, at the moment, we're using them. And we're actually earning a profit on them. So if the bitcoin price is high enough, and you can buy electricity low enough, you can actually use them. So we're just appreciating the stuff fairly rapidly because we think, two year life, maybe that's a little too aggressive. But it's the best estimate we can come up with right now. I mean, nobody knows. If we're attractor people have a pretty good idea of how quickly it depreciate, no one really knows and you just do the best you can to try and do the best we can. So that I hope that explains the change in the basis on the balance sheet.
Therese Byars:

Okay. Based on what metrics and qualities, do you think the market should and eventually will value a publicly traded crypto miner?
Murray Stahl:

Well, eventually, the mining returns are going to stabilize. Right now, there a lot of people who they just won't accept cryptocurrency and they're weighed and for quite understandable reasons, their way to the value of Fiat, and why shouldn't they be, I totally understand. Let's take the U.S., bond market as an example. It's 40 years, 40 of an incredibly robust rate of return. So why shouldn't people think of that as the creation of wealth? In many of those years, I don't think all of them, but many of those years, the rate of return now, of course, it comes from the reduction in rates. But many of those years, the rate of return is basically a function of declining rates. Well, and certainly is a lot bigger than whatever you might say, is the inflation rate. So why shouldn't they think of it as well? It's entirely logical, is minority of people who think as I do, that is completely unsustainable. But also, history, practice, custom call what you will 99% of people are still there. Me, there are pieces of paper that are being debased. 99% of people do not feel that way. And I can totally understand why they don't feel that way. And but ultimately, I believe they're going to change their minds. I believe, ultimately, the biggest asset class, by far, is going to be cryptocurrency and dwarfed bond market, they may not even be a bond market as we currently know it. And I believe it's hopefully going to dwarf the stock market as well. So it's a revolution that's happening. It's a revolution in the way people deal with money. So if you want a little history of it, I don't really have time for a couple minutes because when I answer all the questions, but I believe that civilization itself in the 14th century, Genoa and Venice, took a turn for the worse when accidentally invented fractional reserve banking. So what is fractional reserve banking? There wasn't money at the time in a way we understand today, there was gold and silver and things like that. So most people didn't want to keep it in the home that had wealth, because how can you defend it? You bring it to a bank that would store it for you. And originally, they would charge a fee for that storage because they had the security, they had the armaments, they could do it. And they began to realize that in a typical day, most people don't come to their gold. The only need to retain a fraction of the gold that's there for redemption purposes, the rest, you can lend at an interest. And so began fractional reserve banking. And then began, it doesn't take a great leap of imagination to see that if a government borrows the money, and the government decides how many grains of gold go into a coin, government can actually pay the base coinage. And that started the story. Ultimately, with just a matter of time, till we went from gold to paper, the world resisted for a very long time because the world understood what was going to happen. The Chinese invented paper money about the time of Marco Polo, I believe, they were the first. They certainly weren't the last, United States had banknotes. They didn't really have thoroughly issued currency until it's a war. How else are you going to finance the war? Without issuing money? How else could they fight the Revolutionary War rather issuing bonds called Continentals. Ultimately, they became depreciated to the point where they were virtually worthless. And you can go into the history of every country on the planet and it's happened to basically everybody, it's just a question of what rate of depreciation. Even the United States dollar, one reason United States dollar became the world reserve currency is not United States dollar didn't lose its purchasing power as well since the inception of federal reserve banking, United States dollars lost 99% of its value. as horrible as that is, relative to Sterling or the various European currencies, or the Chinese currencies is pre-communism, it is actually a pretty good experience. Every country did. Every single country did and there were no exceptions. It's just a question of degree. Now, the bond issuance is without parallel, meaning its greatest it's ever been and people come to believe, even though it's the greatest it's ever been. So they are doing it more, not less. They believe that it's immutable, that its purchasing power will remain. These are 99% of people who choose to take these pieces of paper, I don't buy that. And by the way, you diversify in stocks, if, ultimately, if interest rates go up, all the high mobile stocks or income down value anyway. It will be worse owning a bond. It's all tied together. If you want to be diversified, you got to do something else. Until that something else becomes reasonably well accepted. It's going to be volatile, you're going to live through these big declines, and you live through these big advances. So it won't be worse than others. But that's just the way it is, until it becomes recognized by a large number of people instead of a small minority, maybe 1% of investors, et cetera. So we're on the cusp of that happening. The returns of last five years, we've gone from an insignificant fraction of 1% to in my estimation, it's nothing but an estimation, maybe 1% of professional investors have a place in their portfolio for Bitcoin. Although it's not as much as ultimately, I believe they're going to have just started. What's going to happen? Just a matter of time, I don't think a long period of time.
Therese Byars:

So just in the interest of time, we are not quite halfway through the questions. So I don't know anyway, we'll just go on.
Murray Stahl:

We have a hard stop.
Therese Byars:

No.
Murray Stahl:

Because I don't know, how long this call was supposed to last. Okay, I'll keep going. I mean, we don't want to make this a multi-hour call unless people want to make it a multi-hour call.
Therese Byars:

Let's just see how we can get through them.
Murray Stahl:

Let's go till about six o'clock or something. And then, if you want, we can reprieve this, get to another call and because we don't want -- I don't know how many people can stay and listen, I want everyone to hear it. So we go to six. And then, if we get through half, or whatever it is, we'll make another second call to get through everything else. And in the interim, people think of any questions, they can add to list and let's set up another call. Okay, so that would be good to everybody.
Therese Byars:

That's a great idea. Okay. So in that case, we have several more on crypto, and some of them are actually Winland. So I don't know if you want to finish up with that or go on to a few of the others.
Murray Stahl:

Whatever you pick, whatever you think is appropriate. I think we can be here till eight o'clock at night. Whatever you think is appropriate.
Therese Byars:

Yeah, exactly. Yeah. Why don't we switch over, there was a question on TPL. I've reviewed every document on the FRMO website trying to get a history of the progression of the company. There was one quarterly report that stated the percentage of TPL held in each of the partnerships. I'm curious to know what the remainder is invested in. I believe South LaSalle was mentioned as holding 62 seats on the Minneapolis Grain Exchange, that was a while ago. That's the question. I guess it's about TPL holding partnerships.
Murray Stahl:

All right. Okay, so let's just say, let's do it this way, TPL first, and we'll do South LaSalle out. So if you look through all the partnerships directly, so add it all up. And then, you add in the shares of FRMO and its subsidiary from Exxon directly. The number of shares we have as of December 31, 2020 is 54,022. So of that sum, about little less than 7000 is owned directly and the balance is owned in the various partnerships. So to do with South LaSalle; South LaSalle owned, shares in Minneapolis Grain Exchange and toward the end of 2020 in late December, the Minneapolis Grain Exchange merged with the Miami Options Exchange. So now we own shares of the Miami Options Exchange, although sometimes known as MIH Holdings, but I like to call it MIAX. So I refer to it as MIAX and we're now a fairly decent sized owner. I don't know if we're the biggest owner of MIAX, but we're a substantial shareholder of MIAX. MIAX was an options exchange, so let's just compare. By the way, we had sold Bermuda Stock Exchange, we own directly, we had sold that to MIAX as well, the prior year. So just the rationale from MIAX, we owned a little bit of MIAX. MIAX developed completely new technology to do options trading and spent a lot of money doing it. And my humble opinion, or bias, you shouldn't take my word for it. My humble opinion, it's the best technology there is in the world of exchanges. And it's constantly improving. However, for the bulk of our investments, we took another approach, we bought Minneapolis and Bermuda logic there was, they had unique licenses and keys in Minneapolis they had a clearing house. There were three clearing houses in America, Minneapolis owned one, and the CFTC, Commodity Futures Trading Commission was not going to license anymore. And if you want to do things in futures, there it is, you basically have to have a futures license and you need a clearinghouse and put their futures license, put Minneapolis in other words together with MIAX and you have something truly powerful, and great. And I think you can see it -- you can -- if you just follow MIAX, you can see what's happening to the volume. The term everyone else uses is the volume is lighting up. For some reason I never use that term. But that's the term everyone else uses. It's actually pretty accurate. So it's really growing at a very rapid rate. And the merger just closed in late December. And it was growing a fairly robust rate even before that. Bermuda media is the same thing. Bermuda is a national asset Bermuda stock exchange national asset merged with MIAX and bring the technology there, Bermuda was just a small exchange really afford its own technology. And there are all sorts of intriguing things that can be done in Bermuda, because it's its own jurisdiction. It's a country in other words, and it has the advantage of time zone being one hour ahead of America. You can do all sorts of very intriguing things there. And that's about to bear a lot of fruit my opinions, so that was there. So the MIAX story is very, very exciting. That's what sent South LaSalle out. Like I wouldn't mind if I get the money buying more MIAX. It's a truly wonderful exchange. So public, of course, so it's a private investment. But I just can't say enough good things, but I'm delighted with that investment.
Therese Byars:

Great. One. Well, this may be a quick answer to, it appears that one piece of two questions on One Chicago. It appears that One Chicago Exchange stop trading in September 2020 and withdrew its registration to trade securities futures in December 2020. Can you update shareholders on the status of One Chicago did it result in a net loss? Basically, both questions are about that.
Murray Stahl:

It might well because it's winding down. So it's going to -- they are going to liquidate the assets. I don't know what we're going to get, it might and it's a shame. I thought the idea was sound and license was valuable. And it's just too bad. Those things happen. I would have liked to proceed with it. But I guess if you look at the three, we were small owners. We were kind of irrelevant to -- the big owners were CBOE and the CME. And I guess from their point of view they have much larger strategic considerations second fitters, I can see it from their point of view, my point of view, I would like to develop the futures business in single stock futures. It's the obvious alternative to short selling. But then again, short selling is so profitable, it's actually been a very controversial subject for a lot of people. So I guess it changes one go another direction, that's the way it goes. I got accepted, but I would have loved to have continued. If I would have had resources, I would have continued by myself. I just don't have those kinds of -- we don't have, obviously, FRMO those kinds of computer and technology resources. So I got accepted. I got to accept what I got to accept it, too bad but that's where cookie crumbles I guess.
Therese Byars:

Okay, thanks. There's one another question on MIAX. Can you give a brief update on the economic prospects of MIAX group I think you did. Following the formal acquisition of the MGEX in December, what is uppermost percent ownership of MIAX? I do have those numbers if you want them.
Murray Stahl:

Oh, yes. Okay. Yes, I do, if you have it read from memory, why don't you tell us what numbers are.
Therese Byars:

Okay. Directly FRMO owns 653,394 shares or 0.84%. FRMO also has 25.7% of South LaSalle LP, and South LaSalle directories have a lot of numbers throwing out, but you'll get the point in a minute here. South LaSalle directly owns 4,471,378 shares or 5.73%. So FRMOs implied ownership through South LaSalle is 1,149,712 shares. So we have a total direct and implied of 1,803,106 shares or 2.3%. That's it.
Murray Stahl:

Okay. That makes us -- there are a lot of people who are invested in MIAX. And I think the world of haulers, we're up there in the world of haulers. I don't know if we're bigger. At least said, I don't remember we are the biggest, but we are big.
Therese Byars:

Okay. And the next question was the same. So maybe we could switch over? I think that's a quick answer also, though, someone had a question about the float, I might be wrong. But there appears to be a discrepancy in the August 31, 2020 quarterly report regarding ownership, or possibly my definition of public float is not accurate. There's a table that lists ownership of 10% or greater, which totals 74.9% of the shares outstanding. However, there is a line item that shows the public float at 13,538,923 shares or 30.7%, not 25.1%, which would be if you use the number of the large holders, the 10% or greater as 74.9%. Sorry, there's so many numbers here. So the total shares -- anyway so you get the drift. They're confused with their two different numbers, what they are calling float. And I actually have an answer for that. If you want me to take a stab at it.
Murray Stahl:

Go ahead and take a stab at it.
Therese Byars:

Okay. So one number that you see that actually says, here's the public float, it's 13.5 million, that is taking the total number of shares and you subtract the restricted shares that's the OTC Markets definition of it. But that number can't take into account the ownership of the large holders who are in effect they're not restricted, but they are . So we really can't -- we cannot capture the unrestricted shares held by insiders and other long-term shareholders. So the effective float is actually less than 30%, in my opinion.
Murray Stahl:

Okay, that's true. There are some people who are -- yes, there are some people who are not restricted. Like, for example, horizon mechanics itself, owns like 200 and something 1000 shares we actually bought. And those aren't restricted shares. And I personally, in November, I personally bought some shares, and -- in the open market and those shares weren't restricted. And there are others. We probably should endeavor to get a better number, doing it from memory. So it's probably not such a great idea, but that's the gist of it.
Therese Byars:

Yes. I think it's very hard to nail that down, because it's always going to be an estimate, but in a way certainly less than 30% very small float. So, let's see. Now, there is a question on the share repurchases, those shares that FRMO purchased from Steve Bregman, the 20,000 shares, it says that under the share repurchase program, could you shed some light on this transaction from FRMOs perspective?
Murray Stahl:

Well, from FRMO perspective I will let Steve opine if he has a perspective and but nevertheless, perspective some shares were available in I guess you'd call it a block I guess. It's not really what we look to call block but for us there was block and I thought it was good value and I bought for FRMO, made the decision to buy some. That smart.
Steve Bregman:

From my perspective, Steven Bregman here, I, with respect to -- speak with respect to FRMOs perspective, is that Steven Bregman sold some shares at a price that was well below what they were trading for now. And FRMO purchased some shares for a price that was well below what you're trading for now. Think that answers the question.
Murray Stahl:

Okay. That sums it up.
Therese Byars:

Yes. Well, we have four minutes to six. So there were some questions on, the RENN fund, and they want maybe that's a different discussion, I will save those for.
Murray Stahl:

Okay. Well, let's just take one and we'll send and then we'll call it a night and we'll pick it up the next time. Maybe people have other questions they can add.
Therese Byars:

Okay. Regarding the RENN fund, Petro Hunter was a significant holding equity and bonds, which appears to be a seven figure loss. But recently there was a news alert regarding a payout from bankruptcy, that reflected on the most recent holdings. Was this investment made during bankruptcy or in anticipation of bankruptcy? Or was this just a risk that turn south?
Murray Stahl:

None of the above. So when we took over the RENN fund, there was a security in there called Petro Hunter. Petro Hunter was valued at zero. That's just the way it was valued because Petra hunter had gone bankrupt before we took it over. RENN fund was had a security at Petro Hunter you are not paying for it, it's bankrupt, except we thought there's going to be a bankruptcy payment. So that number, that cash payment was phase one of the banks repayment, there may be others. And that amount of money relative to the size of RENN Fund, that's a material number. And there may well be other ones, I can't guarantee that there are going to be other ones, but that might happen. So that was, when you buy a fund like this, you sometimes buy undervalued assets. Now I can understand from a pricing committee point of view, you don't know what's going to happen, so be conservative valued at zero. But that doesn't mean that the probability of payment was zero. And it turned out we got some money. So I thought that was great.
Therese Byars:

That sounds good. Well, it's 5
Murray Stahl:

You set it up. And we'll do all the remaining questions and any questions that come in, in the interim. I'm very gratified that everyone attended. And we have so many intriguing questions. And I know there's more and I apologize, we can't get to everything, because we just don't have the time but we will get to everything. And don't hesitate to put other questions, we want to get, we want to answer everything. And we want to have a dialogue. So I think it's fabulous. And thanks again for coming. We're going to reprise this, very, very shortly to do part two. And thanks for interest in FRMO and thanks for your support. And it's been great and they're really great questions. So talk to you soon then. Thanks so much.
Therese Byars:

Thank you, Murray.
Murray Stahl:

Thanks.
Operators:

This concludes today's call. Thank you for your participation. You may now disconnect.

Q2 2021 Earnings Call Transcript

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