MicroStrategy Stock Analysis and Misinformation

I've seen that most people don’t actually understand how MicroStrategy works in a lot of these subs. There are a lot of posts that treat MicroStrategy like it’s just a leveraged bet on Bitcoin or a “Bitcoin ETF with upside.” That’s not really what’s actually going on when you buy MSTR. It’s clear that most people (even bulls) don’t fully get the engine behind this company. We asked a CFA charter holder to help us walk through it off the books, just to make sure we weren’t missing anything. Their perspective helped clarify a lot. Since 2020, Strategy (that’s the new name they go by) has been raising capital through common stock, preferred stock, and convertible debt. Not to grow revenue or expand operations but to buy more BTC. The company is basically converting market optimism and volatility into more Bitcoin on the balance sheet. When investor appetite is strong and the stock is running, they raise. When BTC dips or the market cools, they hold. It’s a financial structure designed to accumulate assets over time. They mostly issue convertible debt. These are bonds that can turn into stock if the price goes high enough. Because of something called convexity, this structure benefits from volatility. When the stock goes up, the bond gains value faster. When it drops, the bond doesn’t fall as hard. Some institutions take advantage of this by doing delta-neutral trades. They buy the bond and short the stock, so they don’t care where the price goes. They just want movement. MicroStrategy’s system actually works better when the stock is volatile. They created an internal metric called BTC Yield. It tracks how much Bitcoin they’re adding compared to how much dilution they’re causing. If BTC Yield is positive, it means they’re accumulating more BTC per share, even while issuing more stock or debt. And this is the part I think a lot of people miss. You’re not buying “leveraged Bitcoin” when you buy MSTR. You’re buying the possibility of future leverage. That only works if they can keep raising money and if BTC keeps rising. If either of those breaks, the premium disappears. Without volatility, and more directly, new capital, the premium for future leverage will collapse. The question is: will it happen when Bitcoin is worth $2 trillion, or $200 trillion? Strategy is not a pure Bitcoin bet. It’s a bet on volatility and emotion. This is not about belief in Bitcoin alone. It’s about understanding the vehicle you’re using to gain exposure. In fact, for many investors, the cleaner and more cost-effective move may be to simply buy Bitcoin directly. We partnered to write a full breakdown of how the model works, not just the Bitcoin angle but the capital structure too. We're not long the stock. Just think people should understand what they’re actually buying. https://northwiseproject.com/microstrategy-stock-analysis/ submitted by /u/sneezydig [link] [comments]

Apr 23, 2025 - 20:03

I've seen that most people don’t actually understand how MicroStrategy works in a lot of these subs.

There are a lot of posts that treat MicroStrategy like it’s just a leveraged bet on Bitcoin or a “Bitcoin ETF with upside.” That’s not really what’s actually going on when you buy MSTR.

It’s clear that most people (even bulls) don’t fully get the engine behind this company.

We asked a CFA charter holder to help us walk through it off the books, just to make sure we weren’t missing anything. Their perspective helped clarify a lot.

Since 2020, Strategy (that’s the new name they go by) has been raising capital through common stock, preferred stock, and convertible debt. Not to grow revenue or expand operations but to buy more BTC.

The company is basically converting market optimism and volatility into more Bitcoin on the balance sheet. When investor appetite is strong and the stock is running, they raise. When BTC dips or the market cools, they hold.

It’s a financial structure designed to accumulate assets over time.

They mostly issue convertible debt. These are bonds that can turn into stock if the price goes high enough.

Because of something called convexity, this structure benefits from volatility. When the stock goes up, the bond gains value faster. When it drops, the bond doesn’t fall as hard.

Some institutions take advantage of this by doing delta-neutral trades. They buy the bond and short the stock, so they don’t care where the price goes. They just want movement.

MicroStrategy’s system actually works better when the stock is volatile.

They created an internal metric called BTC Yield. It tracks how much Bitcoin they’re adding compared to how much dilution they’re causing. If BTC Yield is positive, it means they’re accumulating more BTC per share, even while issuing more stock or debt.

And this is the part I think a lot of people miss. You’re not buying “leveraged Bitcoin” when you buy MSTR. You’re buying the possibility of future leverage. That only works if they can keep raising money and if BTC keeps rising. If either of those breaks, the premium disappears.

Without volatility, and more directly, new capital, the premium for future leverage will collapse. The question is: will it happen when Bitcoin is worth $2 trillion, or $200 trillion?

Strategy is not a pure Bitcoin bet. It’s a bet on volatility and emotion.

This is not about belief in Bitcoin alone. It’s about understanding the vehicle you’re using to gain exposure.

In fact, for many investors, the cleaner and more cost-effective move may be to simply buy Bitcoin directly.

We partnered to write a full breakdown of how the model works, not just the Bitcoin angle but the capital structure too. We're not long the stock. Just think people should understand what they’re actually buying.

https://northwiseproject.com/microstrategy-stock-analysis/

submitted by /u/sneezydig
[link] [comments]