Anndy Lian
Why MSTR Common Stock Is Not a Pure Bitcoin Play
Let’s cut through the noise. If you’re holding MicroStrategy (MSTR -3.77%), now officially rebranded as Strategy, common stock, you’re not getting an unfiltered slice of its Bitcoin treasury. The company likes to talk about “BTC per share” as if it’s a pure, per-share claim on its growing stack. But that number is an illusion. It’s a headline figure that ignores the reality of Strategy’s increasingly complex capital structure, where preferred shareholders now sit firmly ahead of you in the pecking order.
As of early December 2025, Strategy holds over 650,000 BTC, making it the largest corporate holder of Bitcoin (BTC +1.15%) on the planet. At market prices, that’s well over 56 billion dollars in digital gold. Sounds impressive and it is. But here’s what the glossy investor decks won’t emphasize. A significant and growing portion of that value is already pledged, implicitly or explicitly, to support layers of senior capital that have priority over your common shares.
Over the past year, Strategy has aggressively shifted its financing strategy away from traditional convertible debt and toward a new breed of BTC-backed preferred equity. In 2025 alone, it has launched multiple series of perpetual preferred stock, including STRC, STRD, STRF, and STRK, each designed as an overcollateralized, high-yielding claim on the company’s Bitcoin holdings. For example, the STRK offering in January 2025 alone amounted to 7.3 million shares, and a July 2025 filing announced another 28 million shares of Variable Rate Series A Perpetual Stretch Preferred Stock. These aren’t incidental issuances. They’re central to Strategy’s “21/21 Plan,” an ambitious roadmap to raise 42 billion dollars through a mix of equity and fixed-income instruments to buy even more Bitcoin.
Crucially, these preferred shares carry liquidation preferences, typically 100 dollars per share, and high fixed or variable dividend yields, often in the 8 to 10 percent range. More importantly, they are marketed as providing “downside protection” to investors, explicitly backed by the company’s Bitcoin collateral. This isn’t just marketing fluff. In any stress scenario, even one short of formal bankruptcy, management has a clear incentive, both legally and reputationally, to preserve the value and payouts of these preferred instruments before considering residual upside for common shareholders.
This is where the “BTC per share” metric breaks down. It divides total Bitcoin holdings by the number of common shares outstanding, creating the false impression that each share represents an undiluted claim on the asset. In reality, enterprise value flows through a waterfall. First to debt holders, which still total several billion dollars, then to preferred shareholders, and only what’s left over belongs to common equity. Even if Strategy never defaults and there’s no indication it’s close to doing so, the economic reality of senior claims permanently dilutes the effective Bitcoin exposure of common shares.
Think of it this way. Every dollar of BTC used to collateralize and support preferred dividends is a dollar that can’t amplify returns for common holders. The yield paid to preferred shareholders isn’t free. It’s extracted from the same pool of value that common shareholders hope to benefit from. That’s not a bug. It’s a feature of how capital structure works. Equity is always the residual claimant, and its fair value is always enterprise value minus all senior obligations.
This has direct implications for how we should value MSTR’s common stock. The commonly cited “mNAV,” or modified Net Asset Value, is often calculated simply as market capitalization divided by the value of Bitcoin holdings. But this version is misleading. A more accurate mNAV would subtract the fair market value of all debt and preferred equity from the Bitcoin treasury before comparing it to the market cap of common shares. And when you do that math, the result is clear. The effective BTC backing per common share is lower than the headline number suggests.
In fact, given the scale of preferred issuance in 2025, with over 20 billion dollars raised through capital markets year to date, primarily via equity and preferred stock, it’s entirely rational for MSTR’s mNAV to trade below 1.0 on a structural basis. That doesn’t mean the company is failing. It just means the market is finally pricing in the reality that common shareholders don’t own the whole stack. They own what’s left after the senior layers have been satisfied.
The bottom line is this. Strategy has built a fascinating financial vehicle, but it’s not a pure Bitcoin proxy for common shareholders. The BTC-backed preferred stack isn’t a side note. It’s a core part of the capital structure that materially reduces the economic claim of MSTR holders. Until investors fully internalize this, the common stock will remain priced with a hidden discount. Recognizing that isn’t pessimism. It’s just clarity. And in a market where narratives often override structure, clarity is the rarest asset of all.
Source: https://www.securities.io/strategy-mstr-bitcoin-per-share-illusion/
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