Summary Strategy's four perpetual preferred shares (STRF, STRK, STRD, STRC) represent a genuine pivot toward a "Bitcoin bank" model, finally justifying a long-term mNAV premium. Demand for the preferred suite has been exceptional — STRC alone was 5x oversubscribed, raising $2.5 billion, proving strong institutional appetite. Bitcoin and MSTR have both lagged the recent equity bull run, creating a rare asymmetric entry point relative to historical mNAV levels. My price target is $480–$500, based on a re-rating to the ~2.80x mNAV premium last seen in January 2025, with Bitcoin roughly flat. The key risk is that Strategy's growing financial obligations mean a prolonged Bitcoin decline could trigger a liquidation event. MSTR is a BTC bull thesis only. I have covered Strategy Inc ( MSTR ) rather extensively on this platform since May 2024 . In February 2025 I downgraded the company to a “ HOLD ” (and kept that rating until now), arguing that a rich premium to its BTC holdings (or “mNAV Premium”) was not justified based on what the company was doing. This, I believe, has now changed. Strategy is pivoting their business to something resembling the “Bitcoin bank” vision Michael Saylor started selling to investors back in 2021. In the context of the current bull market, Bitcoin ( BTC-USD ) is still stuck significantly below its ATH. This, in my view, makes Strategy one of the few opportunities left in a stretched market. Why did Strategy ever trade at a mNAV premium? According to an article by VanEck that I fully agree with, Strategy historically traded at a premium to its Bitcoin holdings for three reasons: Market expectations about Strategy increasing its BTC per share. A "regulatory premium" connected to the fact that MSTR is easier to trade than Bitcoin and more accessible via traditional brokerages. Strategy's use of leverage to conduct Bitcoin-related financial transactions. As the regulatory framework for Bitcoin evolved and BTC ETFs got approved, MSTR’s mNAV premium suffered and never fully recovered to its 2021 peak (see chart below). Ultimately, I think the company struggled to convince investors that it makes more sense to buy MSTR rather than holding BTC directly. Bitcointreasuries dot net It has always been my opinion that Strategy could maintain a long term mNAV premium only as long as it came up with more, innovative financial transactions related to Bitcoin. I think the strategic focus on four new preferred shares finally represents a game changer that justifies some sort of long term NAV premium for Strategy. It’s all about the yields In the last year, Strategy started to focus on four new products aimed at yield-seeking investors: Strategy Inc 10.00% SER A PERPETUAL STRIFE PFD STK ( STRF ) Strategy Inc 9.0% SERIES A PERPETUAL STRETCH PREF STK ( STRC ) Strategy Inc 8.00% SERIES A PERPETUAL STRIKE PFD ( STRK ) Perpetual Stride Preferred Stock ( STRD ) These are four perpetual preferred shares of MSTR, and they are structured in a way that makes them effectively act like a bond issuing a (more or less predictable) yield. The company effectively adjusts their yields to make sure the share trades within a certain range. The most recent of the bunch (excluding "STRE", an euro-denominated equivalent launched in November last year) is STRC (“Stretch”). STRC was referenced by Saylor when talking about the possibility of selling Bitcoin to finance its dividend. Annual yields range from ~8% (for STRK) to ~11.5% (for STRC). I will cover in detail these four preferred shares in a future dedicated comparison piece. What’s important for the sake of an investment in MSTR, is that these are exactly the kind of financial products that, in my opinion, justify the very existence of a Bitcoin treasury company like MSTR. With preferred shares, Strategy is finally pivoting into a “Bitcoin Bank” From a strategic standpoint, I think the introduction of these four preferred shares is a master move that pushes Strategy towards becoming an actual “Bitcoin bank”. I think STRF, STRC, STRK and STRD are aimed towards a new kind of target: a person that has a lot of exposure to Bitcoin, believes in the long term potential of BTC but also needs monetizing to cover living expenses. I think it’s reasonable to assume that there is a limited overlap between dividend-oriented investors and crypto investors. However, in the context of Bitcoin eventually maturing into a global reserve asset, I believe this is a great step towards MSTR positioning itself as an institution that can help individuals living off their Bitcoin holdings. And early market demand for this suite of products (which I will cover shortly) seems to prove Strategy right. How do the “STRXs” pay their dividends? Buyers beware I will be clear about the fact that the way Strategy generates a yield for its four preferred shares leaves a lot to be desired in my view, and ultimately only works if Bitcoin appreciates indefinitely. The problem is that these securities do not produce yield from any underlying cash-generating asset: Bitcoin pays no coupon, and Strategy’s software business is far too small to support the payout stack on its own. In practice, the dividend is funded by repeated access to capital markets, meaning Strategy issues more common stock, more preferreds, or more debt, then uses that fresh capital to keep the structure going. As long as Bitcoin rises and investors keep assigning MSTR a premium, that flywheel can look self-sustaining; once the premium compresses or financing windows close, the “yield” starts to look less like income and more like a transfer from new buyers to existing holders. As fellow Seeking Alpha analyst Rida Morwa puts it : “Selling the furniture to pay the rent”. Strong market demand proves the pivot a success so far Strategy's preferred shares have been met with exceptionally strong market demand since their introduction. When Strategy first introduced the 10% Series A Perpetual Strife Preferred Stock in March 2025, the initial goal was to raise $500 million. However, due to high institutional demand, the offering was significantly upsized. Strategy ultimately sold 8.5 million shares at an initial price of $85 per share, successfully raising $711 million. By May 2025, less than two months after the initial offering, the company announced a further $2.1 billion ATM program specifically for STRF. The overwhelming success of the STRF rollout is what gave Strategy the confidence to expand its "alphabet" of preferred shares (STRK, STRD, STRC) into what is now a massive, multi-billion-dollar capital generation engine. STRC originally targeted $500 million. The offering was 5x oversubscribed and Strategy sold 28 million shares at $90 per share, raising $2.521 billion ($2.474 billion net of underwriting costs), making it one of the largest US IPOs of 2025. Strategy now competes with JP Morgan, not with other treasury companies In my view, one of the reasons why MSTR’s four preferred shares had such a success is that the company is effectively competing with the likes of the JPMorgan Equity Premium Income ETF ( JEPI ) and the JPMorgan Nasdaq Equity Premium Income ETF ( JEPQ ). These two funds offer a high ~8% yield on the S&P 500 and the Nasdaq-100 respectively. The way the yield is generated for JEPI and JEPQ is completely different from the preferred shares of MSTR, focusing on an option strategy based on diversified, very liquid indexes. The “STRXs” on the other hand are subject to company-specific risk and to risks tied to the direction of Bitcoin. Personally, I find there is a complementarity element in terms of risk profile between these instruments. Ultimately however, MSTR’s preferred shares are the only tools currently available to easily monetize Bitcoin with a somewhat predictable yield. And that commercial reality is core to their success. Why this is bullish for Strategy Since its Bitcoin pivot, Strategy needs to keep markets “excited” so they keep assigning a mNAV premium to the company (i.e. pay more than $ 1 to access $ 1 of BTC). This, in turn, allows the company to acquire more Bitcoin (increasing BTC per share and once again fueling excitement) and pay dividends for their preferred shares. The issuance of the “STRXs” series of preferred shares has been a great success in that it kept investors excited, with demand far outpacing the initial target offerings. Strategy Can this scheme be sustainable long term? In my opinion yes, as long as Bitcoin keeps appreciating. As long as the mNAV premium stays above 1X, MSTR can keep selling the story that BTC Yield is going up, meaning shareholders are “entitled” to an ever-growing amount of BTC tied to their shares, eventually recouping the mNAV premium they paid at purchase. Additionally, the company can issue new shares to finance its dividend obligations and any financial obligation in general. Why I am upgrading MSTR: there’s more to the bank pivot story Bitcoin, and especially Strategy, did not participate in the recent bull run of Tech, Semiconductors and generally US equities (see chart below). With valuations getting somewhat stretched, I think Strategy is one of the few remaining “asymmetric bets” in the market. Seeking Alpha What makes me bullish on Strategy today are three elements: Strategy having found a way to justify a long-term mNAV premium (offering monetization to BTC holdings via their preferred shares). The possibility of a Bitcoin rally, given the cryptocurrency did not participate in the recent market rally and sits well below its ATH. Shares issuance for MSTR having slowed down, a result partially due to the success of the “STRXs” suite of products. Micro Macro Finally, there is a relative margin of safety in that Strategy has $2.2 Bln in cash & equivalents on their balance sheet. This is enough to cover ~19 months of dividends from the four preferred shares at today’s notional size and current coupon levels. My price target for Strategy: $500+ Given its “Bitcoin bank” pivot, I think MSTR can be considered once again a valid leveraged bet on Bitcoin. I think that in a bull market, MSTR could get back to at least the mNAV premium of ~2.80X it last saw in January 2025. That would represent an upside of ~2.5X against the current premium (1.12X). Based on this calculation, my price target is $480–$500 per share, which corresponds to applying a 2.80x mNAV multiple to today’s ~$195 MSTR price, assuming only a re-rating of the premium back to its January 2025 level with Bitcoin roughly flat. Realistically, if we are to see a strong BTC bull run, the upside could be far more than $500, once accounting for any additional BTC that Strategy is likely to acquire, increase in the market value of its BTC holdings, and market hype stretching the mNAV premium further. Note that I am using the mNAV figures from “ Bitcoin treasuries ”, which are slightly lower than what Strategy reports on their website because they consider the company’s debt and underlying business rather than the simple calculation of BTC holdings against market cap. Risks to my thesis Of course, just because Strategy is cheap in historical terms doesn’t necessarily mean entering a trade in MSTR today is a good idea. The company is increasingly putting itself in a position where facing a prolonged (or permanent) decline in the value of Bitcoin would likely mean a liquidation event. That is a direct result of the increase in financial obligations that the company has assumed since its BTC pivot. Back in 2020, MSTR only bought Bitcoin with available cash, meaning the company could not technically face liquidation, even if its BTC stack went to 0. Today the situation has radically changed, with Strategy having taken on debt to purchase Bitcoin and having issued new shares that carry dividend obligations. In this regard, MSTR’s future is inevitably tied to that of Bitcoin and only investors that are bullish BTC should consider entering a trade in Strategy today.
