MicroStrategy's Bitcoin Holdings: A Closer Look at Who Owns What

MicroStrategy, a company known for its massive Bitcoin holdings, has changed how it reports its metrics. The new numbers show that not all of the company's Bitcoin stash belongs to shareholders. In fact, lenders and preferred investors get paid first, leaving common shareholders with a much smaller portion.

The company holds around 843,775 Bitcoins, making it the largest public company by this metric. According to its live dashboard, this is worth approximately $58 billion. However, when you subtract the debt owed to lenders and preferred investors, which totals around $22 billion, about $36 billion in Bitcoin is left for common shareholders.

This new metric is called the 'net reserve.' It gives a clearer picture of how much Bitcoin truly belongs to shareholders after everyone else has been paid. The company took on this debt to buy more Bitcoin and laid out its approach in its Digital Credit framework earlier this year.

One major catch, however, is that servicing this debt costs around $1.8 billion per year. This includes interest payments and dividends. To cover these expenses, the company has set aside a cash reserve, which was established in December. A metric called 'amplification' measures the risk involved, currently sitting at about 1.53x.

This means that when Bitcoin rises, shareholders gain more, but they also lose more when it falls. The stock price of MicroStrategy (MSTR) has dropped by around 77% in a year, significantly more than Bitcoin's 45% fall. The company's founder and executive chairman, Michael Saylor, acknowledged the need for new financial language to understand the complexities of Bitcoin capital markets.