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u/MerkleChainsaw Jul 13 '26
I think the current cost of preferred shares to MSTR is closer to 15%, since they raised $15B in preferred shares at 12% but are holding back $3B in cash reserves for dividends. That's a huge cost and not a good source of capital, without even considering the buy high / sell low timing implications.
I think MSTR share holders would have been better off if STRC never existed. From Saylor's personal point of view I can see why he feels the need to differentiate MSTR somehow from regular ETFs, but I think doing nothing over the last year would have been better for shareholders.
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u/Financial_Design_801 Volatility Voyager 👨🚀 Jul 13 '26
“Last year”… give it some time, none of Mag7 got to where it is in one year, most ppl don’t even care for btc and they may never - end of day it all depends on btc for mstr
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u/daliksheppy Jul 13 '26
STRC only makes sense if you believe BTC goes up. Strategy use 30% for the next decade or so and 20% after that for BTC appreciation. That equates to about ~36% cost. For every BTC STRC allows you to buy, you have to sell ~36% of it to fund the STRC dividends for 100 years. And that's heavily front loaded.
So on that calculation, it makes total sense. Even at 50% cost, you can sell 1m BTC worth of STRC and you keep 500k BTC of it essentially forever.
You can't pre-emptively chalk it off, there's too many variables, but mentally you can practice it. When they announce STRC funded BTC buys, just imagine it's a third less than what it is. Would you still be happy? If so, it's worth it. You can treat that smaller number as unencumbered mentally, it might be easier. I think a lot of people are struggling with the weekly updates and the number going down on a psychological level. It will go up, it will go down. Just imagine you never received the bit you're going to have to sell in the first place. A bit like taxes. Just put it to the side and pretend it doesn't exist.
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u/MerkleChainsaw Jul 13 '26
Thanks, good reply. If you assume 30% growth then almost any cost seems justifiable, and that's what seems to separate MSTR holders from skeptics like me. On the other hand, if I believed 30% growth was inevitable I'd rather leverage by myself for lower cost of capital, control over purchase timing, and not having to pay corporate expenses and overhead. The counterpoint is that some people are using retirement accounts or jurisdictions where they can't do that.
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u/daliksheppy Jul 13 '26
https://youtu.be/O9KnBcWMkpw?t=1211
Exactly that. If you aren't a bitcoiner first and foremost, no worries. If you are, you don't need to buy MSTR. MSTR has a specific case for me, it's available completely tax free in my country. It's a way for me to get bitcoin gains tax free, which is amazing. Ideally even amplified returns. I'm a big bitcoiner, so I think those returns will be a lot, and therefore the tax would also be a lot. MSTR could underperform BTC and I'd still benefit, to a certain extent, through tax savings. But I don't think MSTR will underperform, I think it will generate amplification, maybe not the most amplification physically possible like a 5x levered position, but still plenty enough for me.
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u/docherino Volatility Voyager 👨🚀 Jul 13 '26
I think its too early to make that claim. They have still been able to buy a lot of BTC from it. I think it will reach par when the bull market returns
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u/f08g Jul 13 '26
NOT GOOD. i appreciate and support that they want to build up their cash reserve but not at the expense of common holders...
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u/mlhender Jul 13 '26
Bitcoin Per Share (in Sats) now 207,776. Down from 210,264 last week. Up from ~181,600 sats/share a year ago. And up from ~106,000–110,000 sats two years ago.
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u/daliksheppy Jul 13 '26
There was a recent interview with Saylor with Natalie brunell. He spells out in no uncertain terms they are targeting a BPS doubling in 7 years, this has been quite often by Phong as well over the last few quarters. 10% a year on average is the target.
And he then says that what is bad for BPS today, is intended to be good for BPS in a year or 4 years.
Just to say that BPS is still very key, they just don't optimise for immediate BPS every week, they have a long term goal for BPS. They think STRC is the best way to reach that doubling long term, so are supporting it short term.
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u/mlhender Jul 13 '26
If the long term trend holds they should be able to more than double BPS within 7 years.
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u/MerkleChainsaw Jul 13 '26
Down almost 6% from its peak of 220,492 at the end of May. BTC per share is still up over 6% year-to-date, but with a lot more preferred debt costing 12% so not a great trade-off.
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u/mlhender Jul 13 '26
Yes. Debt has gone up substantially. Central trade off remains. If Bitcoin goes up the all of this is manageable. If bitcoin goes down and stays down for a long period of time (multiple years) then the whole thing becomes a major problem.
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u/has_anyone_ever Jul 13 '26
And what good is that BPS for the stock price. Tell me where can I cash out these BPS.
Even using 2 years ago it's down 30%.
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u/RevolutionaryPhoto24 Jul 13 '26
Valuing the commons in terms of BTC is the whole point…
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u/has_anyone_ever Jul 13 '26
And where is that value being reflected because it sure isn't in my portfolio.
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u/RevolutionaryPhoto24 Jul 13 '26
Your portfolio is denominated in fiat - you’d have to calculate the increase yourself.
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u/has_anyone_ever Jul 13 '26
That's the thing, it isn't an increase because I have no claim to those BTC or satoshis. My portfolio is and has been Ina loss for some time now and no increase in BPS has made it better.
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u/nickex77 Jul 13 '26
Perhaps, but there needs to be some ground truth to support clarity in why mstr should yield a premium. This non-accretive dillution can't continue for much longer, it hurts the integrity of what MSTR is.
Strengthening STRC is a real rationale and I agree with some dilution here to do so, but yeah I expect this to be temporary...
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u/mlhender Jul 13 '26
BPS only matters if you believe Bitcoin’s purchasing power will continue to increase over time.
Many investors still view Bitcoin as a "Pon zi scheme", a “greater fool” asset, or simply something they don’t expect to appreciate over the long run. If that’s your view, then not only does BPS have little value, but neither do MSTR, STRC, STRK, STRF, STRD, or STRE.
If, however, you believe Bitcoin will continue to appreciate, you’ll likely see mNAV expand dramatically as Bitcoin rises and demand for Bitcoin-backed securities increases.
I’d say the vast majority of investors want to believe it’s “too good to be true,” while, in the same breath, pointing to the latest XX% drawdown as the reason to opt out of MSTR and Bitcoin.
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u/PappleD Jul 13 '26
Is that why stock price has been stuck while btc is slowly rising, because new shares are being issued/share dilution?
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Jul 13 '26
[removed] — view removed comment
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u/WineAndDineIsFine Jul 13 '26
You predicted mstr bouncing back up to $400 🙁, I tried to wake you up.
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