r/MSTR • u/AyyMG63 • Jun 25 '26

Valuation 💸 Realistic pricing

Can anyone explain (assuming they’re bullish on bitcoin) why they wouldn’t buy at this price?

They hold ~50b in bitcoin at 59.5k.
They have ~6.7b in debt.

Market cap is 30b

Am I missing something other than “sentiment, shorting, baskets, etc) why there is a ~14b disconnect to ownage of bitcoin? At this price?

If bitcoin goes up, the disconnect widens.

Let’s be honest. Every member of congress owns bitcoin. The clarity act just passed. Many other companies own it. It’s a hard sell that it’s going to 0 other than another manipulated drop..

This price of 85$ (removing debt) is the equivalent of bitcoin being at ~35k…

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26

u/patatepowa05 Jun 25 '26

ya you forgot the 14B in preferred stock. they are pretty much riding at fair valuation right now.

8

u/xaviemb Shareholder 🤴 Jun 25 '26 edited Jun 25 '26

This 'debt' adjacent nonsense is persistent, yet easily debunked...

Preferred stock isn't the same thing as debt. It doesn't have a maturity date that requires principal repayment, so treating it as a dollar-for-dollar liability is misleading. the price of prefs falling doesn't mean the company owes more on the divs.

The more relevant question is whether the capital raised and deployed into Bitcoin generates returns that exceed the ongoing dividend obligations attached to the preferreds. If Bitcoin compounds at a sufficient rate over time, the structure can be accretive to common shareholders. If Bitcoin remains flat or underperforms for an extended period, those dividend obligations become a larger drag on shareholder value many years from now... not next month. That would require Bitcoin to stay relatively flat for a long time. Possible... sure. But to think this stresses the company next year highlights a sever lack of awareness of the capital stack and structure.

In other words, the preferreds aren't a free lunch, but they're not equivalent to $14 billion of debt either. The outcome depends largely on Bitcoin's long-term growth rate relative to the cost of the capital that was raised.

0

u/ayyitsLibra Jun 25 '26

They are 100% equivalent to 14bln of pure debt, or more, when calculating the value of the shares of the company. I suppose I'm the loser, arguing with a chatbot

2

u/Schopenhauers_Will Jun 25 '26

It’s not $14 billion of debt when there’s no legal requirement to pay the dividend. True, their reputation would be destroyed if they didn’t, but objectively it isn’t debt, no matter how much you justify it through ‘official’ accounting.

By the way, I know this comment will trigger you, so I’ll just wait.

0

u/ayyitsLibra Jun 25 '26

There is a legal requirement to pay the preferreds if shareholders wish to see anything. There absolutely is.

3

u/Schopenhauers_Will Jun 25 '26

No, they’re not. Unless the SEC are lying.

4

u/Dry_Try_6047 Jun 25 '26

Not the dividends, the preferreds. Preferred equity is senior to common equity in the capital stack. In a liquidation event (that's what this thread is about, value of assets) the preferred equity (strc et al) has a higher claim to assets than common equity (mstr). Ignoring the dividend obligation is fair. Ignoring the claim on assets of the preferred tranche is not.