With Strategy's Premium Nearly Gone, MSTZ Is A Tactical Buy

MicroStrategy (MSTR) is rated a short-term Sell due to its minimal premium to net Bitcoin value and increased preferred capital obligations. MSTR’s capital structure now includes ~$22.15B in senior claims with $1.76B annual cash requirements, making common shareholders more exposed to Bitcoin volatility. Recent share issuances and Bitcoin sales have diluted gross Bitcoin per share, while the software business remains too small to materially impact valuation. MSTZ is rated a tactical Buy for short-term bearish trades on MSTR, but should be held only for a few trading days due to path-dependent risks.

The large $8.22B net loss was mostly an accounting situation resulting from Bitcoin falling during the quarter. For me, though, the more important event is that