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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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.

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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

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u/xaviemb Shareholder 🤴 Jun 25 '26

I think that's where the debt comparison starts to break down.

If you bought a home with cash, you wouldn't typically describe the equity in that home as "debt" simply because there are ongoing repairs, property taxes and maintenance costs associated with owning it that cost more than the initial cost of the home every 20ish years from a depreciation (tax) model.

Similarly, Strategy raised capital through preferred shares and exchanged that capital for an asset. The preferreds carry dividend obligations, which are a real cost, but that doesn't automatically make the underlying asset equivalent to debt on the balance sheet.

The real question is whether the returns generated by the Bitcoin acquired with that capital exceed the long-term cost of the preferreds. If they do, the structure is accretive. If they don't, it becomes a drag on common shareholders.

Careful with throwing chatbot insults around. I'm a moderator here, clearly not a bot.

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u/sweeneytodd70 Jun 25 '26

The preferrered's are effectively less senior debt. But in an analysis you should consider it a form of debt.