MSTR
The “cheap Bitcoin” story just got a side-eye
Strategy Inc. has long sold itself as the ultimate Bitcoin wrapper: if you like BTC, why not buy the stock and get a leveraged version of it with a ticker? The Block’s new research note basically says, not so fast. The firm argues MSTR isn’t trading at a bargain to Bitcoin — it’s trading like a leveraged residual claim after debt and preferred obligations are taken out of the picture.
The balance sheet is doing the heavy lifting
That matters because Strategy’s treasury is huge, but it’s also underwater on paper. The company holds 847,363 BTC bought for about $64.10 billion, and with Bitcoin around $64,600, the stash is worth roughly $54.7 billion. That leaves a chunky gap versus cost basis, and the report says the pain is worse than the headline number suggests because some of the newer coin buying came at even higher prices and with more expensive capital.
And no, this is not a clean liquidation story. The company doesn’t pledge its Bitcoin as collateral, its unsecured converts don’t create an immediate forced-sell cliff, and annual interest costs are only about $35 million. The real stress point is liquidity: Strategy faces around $1.7 billion in annual preferred dividends, noteholder cash put dates starting in 2027 and clustering in 2028, and a $1.4 billion reserve that buys time — but not forever.
The flywheel is wobbling
The report’s sharpest jab is that the old Strategy flywheel may be getting harder to spin. The preferred stack, especially STRC’s 11.5% dividend, is now eating up most of the cash drain, and STRC recently traded so far below par that Strategy had to pause its preferred ATM funding channel. That’s awkward, because the whole model depends on constantly issuing new capital without choking on the cost of the old capital.
Big picture: MSTR is still the most famous corporate Bitcoin trade on the board, but the “you’re basically buying BTC at a discount” pitch just got a lot less cute. If the funding engine keeps sputtering, the stock could start behaving less like digital gold with turbo and more like a levered balance-sheet story with very sharp edges.