Most great stories follow the hero’s journey. Part of the hero’s journey is often “tests”, and one of the tests is sometimes a test of faith where no one believes the hero. Think no one believing Noah that the storms are coming (and thus he needs to build an Ark), or no one believing
You are missing the obvious, MSTR NAV has massively outperformed BTC, increasing BTC/share every year, and continues to do so. IF you are a BTC bull, MSTR is the better buy. This isn't risk-free, it will not happen if BTC declines, but if you like BTC, you should like MSTR more.
I agree with your math, but if you'd forgive me I'd note that the math never really mattered before at the peak, and by that same logic, it isn't entirely clear why it must matter now. I have a hunch that the short MSTR might end up being a poor trade as this absolutely can get to a 100-200% NAV premium at some point again. Skeptical? Here's a possible narrative: MSTR survives this latest crypto storm, and becomes a "weathered company" that deserves a mature premium.
The concept of "issuing shares at a NAV premium to create value" is just so appealing to the average person (even if it just basic capital allocation) that the move back to a big NAV premium looks inevitable to me.
I'm generally familiar with the complex but haven't looked at the details in a year or two. Is there some advantage to MSTR having the locked-in financing that gives them some positive convexity if bitcoin goes higher? When you add in the strong potential for the common to trade at a significant premium if excitement about cryptocurrency returns, I think you get reflexivity and a more option-like payoff. That's my explanation for why it stubbornly trades above NAV.
this was the argument for DATs overall last year which i think has been pretty thoroughly debunked. It also does not make sense if you think about it through.
You are missing the obvious, MSTR NAV has massively outperformed BTC, increasing BTC/share every year, and continues to do so. IF you are a BTC bull, MSTR is the better buy. This isn't risk-free, it will not happen if BTC declines, but if you like BTC, you should like MSTR more.
Satoshis/MSTR share:
2020 56,598
2021 83,353 +47.3%
2022 84.872 +1.82%
2023 91,097 +7.34%
2024 158,826 +74.35%
2025 194,986 +22.77%
2026-07-07 210,264 +7.84%
Wow, that is a bold take!
How does the fact that they can sell Bitcoin and buy back their preferred and common shares factor into your view?
(The value of the Bitcoin they hold per share is 30% more than the current share price. Easy arbitrage, it seems to me!)
I agree with your math, but if you'd forgive me I'd note that the math never really mattered before at the peak, and by that same logic, it isn't entirely clear why it must matter now. I have a hunch that the short MSTR might end up being a poor trade as this absolutely can get to a 100-200% NAV premium at some point again. Skeptical? Here's a possible narrative: MSTR survives this latest crypto storm, and becomes a "weathered company" that deserves a mature premium.
The concept of "issuing shares at a NAV premium to create value" is just so appealing to the average person (even if it just basic capital allocation) that the move back to a big NAV premium looks inevitable to me.
Good luck on your short!!
I'm generally familiar with the complex but haven't looked at the details in a year or two. Is there some advantage to MSTR having the locked-in financing that gives them some positive convexity if bitcoin goes higher? When you add in the strong potential for the common to trade at a significant premium if excitement about cryptocurrency returns, I think you get reflexivity and a more option-like payoff. That's my explanation for why it stubbornly trades above NAV.
this was the argument for DATs overall last year which i think has been pretty thoroughly debunked. It also does not make sense if you think about it through.
Could you walk me through what you mean by that last part? Maybe I'm struggling to think it through. DMs also open if you prefer.