MicroStrategy's Premium to Bitcoin Value Disappears, Leaving Shareholders Exposed
MicroStrategy (MSTR) has lost its premium to net Bitcoin value, which is causing some investors to reevaluate their stance on the company. According to an analyst's report, MSTR's capital structure now includes approximately $22.15 billion in senior claims with $1.76 billion annual cash requirements.
This has made common shareholders more exposed to Bitcoin volatility, as they are no longer insulated by the premium. The recent share issuances and Bitcoin sales have also diluted the gross Bitcoin per share.
The software business of MSTR remains too small to significantly impact valuation, which is another reason why investors are bearish on the company's prospects. As a result, the analyst has rated MSTZ (a short-term trading position) as a tactical buy for short-term bearish trades on MSTR.