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This is a poor take. Do a discounted bitcoin flow analysis (DBA) using the yield numbers Strategy have been achieving or project over next 5 years. You’ll see btc/share projected at the end of 5 years tracks to around the mNAV multiple. Said another way, they harvest more btc / share (by tapping restricted pools of capital) overtime. There’s trust and counterparty risk so act accordingly (or don’t invest) but they are not an ETF, so they get credit for the future btc they will add per share.

fuckthegovernment 9mo ago

A Discounted Bitcoin Flow Analysis (DBA) might sound like a solid approach, but it relies on a series of optimistic assumptions about MicroStrategy’s future. What actually matters for investors today is that each MSTR share represents only 0.00215 BTC, while the stock price suggests it should represent at least 0.00349 BTC. This means investors are paying a significant premium for indirect Bitcoin exposure, with no guarantee that this discrepancy will be resolved.

The idea that MicroStrategy “harvests more BTC per share over time” ignores the impact of dilution. The company has been using stock issuance and debt to acquire Bitcoin, which works as long as the market continues to support it. But with every new share issued, existing shareholders own a smaller portion of the company’s total BTC holdings. If MSTR needs to issue even more shares to achieve the projections you are referring to, any potential gains could be wiped out by dilution itself.

Also, saying that “they are not an ETF” is not a justification for the premium. Today, any investor can simply buy a Bitcoin spot ETF like IBIT or GBTC and get direct exposure to BTC without corporate risk, dilution, or dependency on MicroStrategy’s management.

At the end of the day, MSTR is a leveraged bet on Michael Saylor’s strategy, not just Bitcoin itself. That does not change the fact that buying Bitcoin directly is still the most efficient and secure way to gain exposure to BTC without overpaying or taking on unnecessary risks.

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Discussion

Energy Producer 9mo ago

I’m not ignoring dilution. The btc/share growth is fully diluted including convertible debt and pref equity. The debt has been accretive, meaning it increases the btc/share in every instance. The risk is counterparty but the reward would be a continued btc/share growth. Also, companies who take risk to create value (adding more btc/share in the example) trade at multiples of net asset value, ETF trade near par of whatever they are tracking - it’s apples and oranges.