Strategy (ex-MicroStrategy)

Phase A — Understand the business

Lens 1 · Company Overview

Strategy Inc (Nasdaq: MSTR; renamed from MicroStrategy in 2025) is the largest corporate holder of bitcoin in the world. Two businesses sit inside one ticker:

1. The bitcoin treasury (the real company). As of Feb 13, 2026 it held ~717,131 BTC acquired for an aggregate $54.5B at an average ~$76,027/BTC. By the Q1 print it held 762,099 BTC at March 31, 2026 (carrying value ~$51B) and 818,334 BTC as a subsequent-event count, and 845,256 BTC by June 7, 2026. The bitcoin is described by management as "the economic backing for our equity and fixed income securities, which enables our capital markets strategy" — i.e. the BTC is collateral for the financing machine.

2. The legacy software business (the shell). Enterprise business-intelligence software (the old MicroStrategy product). FY2025 total revenue $477.2M, +3.0% YoY — and shrinking in mix toward subscription: subscription services $175.7M (+64.5%), product support $204.2M (−16.2%), product licenses $39.7M (−18.3%). FY2025 software gross profit was $327.8M but the segment posts an operating loss before the bitcoin line once the ~$5.4B unrealized BTC mark is set aside. Management states plainly: "We do not expect cash and cash equivalents generated by our software operations to be sufficient to satisfy our short-term or long-term liquidity needs". The software is a rounding error against a >$50B bitcoin position; it exists mostly to keep the entity classifiable as an "operating company" (see Lens 8 — index inclusion).

Contract structure / payment terms: On the software side, recurring ratable subscription + annual support (remaining performance obligation $588.0M, ~$344.2M due within 12 months ). On the capital side, the binding obligations are perpetual preferred dividends (STRF 10% fixed-cumulative, STRK 8%, STRD 10% non-cumulative, STRC variable — raised to 11.50% Feb 28 2026 ) plus convertible-note coupons. These are the "customers" that matter — the security holders the company must keep paying.

Key people: Michael Saylor — Executive Chairman & Chairman of the Board, controls a majority of Class B stock (10 votes/share) and thus a controlling share of total voting power. Phong Le — President & CEO. Auditor: KPMG LLP (McLean, VA). Incorporated in Delaware; HQ Tysons Corner, VA. Credit rating: S&P B- (Oct 27 2025, affirmed Dec 2025) — deep speculative grade.

Lens 2 · Supply Chain

A bitcoin-treasury vehicle has no physical supply chain; its "supply chain" is the capital-formation pipeline and the custody stack. Naming every stakeholder:

Upstream — capital sources (inputs):

• Equity buyers of MSTR common via the ATM (banks running the ATM book) — primary funding source.
• Preferred-stock buyers across four/five instruments: STRF (income, low-risk), STRC (short-duration, money-market-substitute), STRK (yield + convertibility upside), STRD (highest yield, non-cumulative), STRE (Euro-denominated).
• Convertible-note holders (2028 → 2032 maturities) and historically a bitcoin-secured loan.
• Crossover/retail demand chasing leveraged BTC exposure.

Midstream — the company: Strategy issues securities → receives USD → routes through trade-execution partners affiliated with its custodians → buys BTC close-in-time to the raise to minimize market risk.

Downstream — custody (the asset sits here): Three U.S. custodians hold substantially all the BTC, deliberately split to diversify counterparty risk:

• Coinbase Custody Trust Company, LLC — 287,322 BTC (40%)
• Anchorage Digital Bank N.A. — 262,194 BTC (37%)
• Fidelity Digital Assets, NA — 167,615 BTC (23%)

Chokepoints / single-source dependencies:

• The premium-to-NAV is the upstream chokepoint. When MSTR trades above bitcoin NAV, equity issuance is accretive and the pipeline self-reinforces. When it trades below NAV (the June-2026 state), equity issuance is dilutive to BTC-per-share and the pipeline breaks — the single most important dependency in the entire model (see Lens 3, 11, 13).
• Continuous access to capital markets is existential: the preferred dividends and convertible coupons are paid largely from new issuance, not operating cash. A frozen market (a sharp BTC drawdown that also craters MSTR) is the kill-switch.
• Custodian performance / private-key integrity — a custodial failure or key loss at any of the three is a catastrophic, largely uninsured single-point risk.

Lens 3 · Competitive Advantages (moats)

The bull's moat thesis rests on four pillars; only two are durable.

1. First-mover scale & index/liquidity status (durable-ish). MSTR is the original and by far the largest bitcoin treasury company, with the deepest equity liquidity, the most developed capital-markets apparatus, and an entire family of bespoke "digital credit" preferred instruments no peer has replicated at scale. Saylor invented the category; the brand is "leveraged bitcoin equity." This is a real, if narrow, moat — distribution and capital-markets sophistication.

2. Capital-structure engineering (genuine, but double-edged). The STRF/STRC/STRK/STRD/STRE stack is genuinely clever: it segments fixed-income demand by yield/duration/risk and raises non-dilutive capital (preferred issuance does not increase Assumed Diluted Shares). In 2025, ~$5.69B of the $25.15B raised was non-dilutive preferred. That is a real engineering edge over a naive "just sell common" vehicle.

3. The premium-to-NAV "moat" (NOT durable — and currently inverted). For years the core advantage was reflexive: a premium let MSTR mint accretive BTC-per-share by issuing stock above NAV, which justified the premium, etc. This is not a moat — it is a market mood, and it has reversed. mNAV went 3–4x (2024 bull) → ~2.5x (Dec 2024) → ~1.16x (spring 2026) → ~0.82–0.86x (Apr–Jun 2026). A "moat" that can flip to a discount is a beta, not a moat.

4. There is no operating moat. The BI software is a declining, sub-scale asset in a market owned by Power BI / Tableau / Snowflake-adjacent tooling; it is not a competitive weapon, it is a legacy annuity in slow runoff.

Bargaining power: Strategy has little over its capital providers. Preferred holders demanded — and got — a STRC rate hike to 11.50% as BTC weakened; the cost of capital rises exactly when the company can least afford it. Over bitcoin, it has zero pricing power (price-taker). Over software customers, modest pricing power inside a shrinking base.

Lens 4 · Segments

Strategy does not report bitcoin as a revenue "segment" — the BTC P&L flows through the unrealized gain/loss on digital assets line under ASU 2023-08, not revenue. So segment economics split cleanly:

Software revenue by line (FY2025 vs FY2024):

The story is the cloud transition: subscription up sharply, license + support in structural decline as customers migrate off perpetual licenses. Net software revenue is roughly flat and will likely stay flat-to-down. Geographically, the US dominates (Q1 2026: US $69.3M of $124.3M total), with material foreign operations (foreign pretax income was positive $52.4M in 2025 vs a $5.58B US pretax loss — because the US entity bears the BTC mark).

The bitcoin "segment" KPIs (the metrics that actually matter):

The trend is sharply decelerating. BTC Yield — the company's own headline accretion metric — fell from 74.3% to 22.8% in FY2025, and to just 3.2% in Q1 2026 (vs 11%+ in Q1 2025). Cause per management: fewer BTC bought, a worse dilutive/non-dilutive mix, and rising equity issuance used to pay dividends and fund the USD Reserve rather than buy bitcoin. This is the accretion engine losing power in real time.

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Phase B — Measure performance

Lens 5 · Earnings Result (latest print: Q1 2026 10-Q, period ended 2026-03-31)

The headline is a catastrophe by GAAP and a non-event operationally — both true at once.

Q1 2026 income statement:

• Total revenue $124.3M (+11.9% YoY from $111.1M) — software fine, slightly accelerating.
• Gross profit $83.4M.
• Unrealized LOSS on digital assets $14.46B (vs $5.91B loss in Q1 2025) — the bitcoin mark-to-market.
• Loss from operations $(14.47B).
• Interest income/(expense), net +$1.8M (flipped positive as the USD Reserve earns interest).
• Net loss $(12.54B); net loss attributable to common $(12.77B).
• Preferred dividends $229.5M (vs $10.6M Q1 2025) — a >20x jump as the preferred stack scaled.
• Basic/diluted LPS $(38.25) (vs $(16.49) Q1 2025).
• Weighted-avg shares 333.9M (vs 256.5M) — heavy YoY dilution.

What it says: The GAAP loss is entirely a bitcoin price move (ASU 2023-08 fair-value accounting), not operational deterioration — BTC fell intra-quarter, the carry value dropped to ~$51B. The genuinely important operating fact buried in the print: preferred dividends are now a $229.5M/quarter cash obligation — ~$0.9B annualized — against a software business that generates well under that in operating cash. That gap is the company's defining stress, and it is widening as the preferred stack grows.

Balance-sheet flags: Cash $2.25B (all designated USD Reserve); BTC unencumbered; convertible debt ~$8.2B; deferred tax liability on unrealized BTC gain ~$2.42B at YE2025 — note this reverses into a deferred tax asset + valuation allowance now that BTC sits below cost basis, a future non-cash earnings risk management flagged itself.

Market reaction / what's priced in: The market has de-rated the premium entirely — MSTR ~$112.5, mkt cap ~$39.4B (June 18 2026) trading at ~0.85x bitcoin NAV. The stock is no longer rewarded for GAAP losses driven by BTC; it is being punished for the structure (leverage + perpetual coupons + dilution) on top of the BTC drawdown.

Lens 6 · Earnings Calls (sentiment trend)

No transcripts in the research layer (transcripts=0) — sourced from filings tone + public reporting.

The narrative arc across the last ~4 quarters has shifted from offense to defense:

• 2024 / early 2025 (offense): "Accretive bitcoin acquisition," BTC Yield as the hero metric, ever-larger capital plans — the $84B "42/42" plan ($42B equity + $42B fixed income) announced May 2025, up from the original $42B "21/21". Tone: aggressive accumulation toward an implicit "1 million BTC."
• Late 2025 (transition): Introduction of the USD Reserve (Dec 2025, $2.25B) — a defensive liquidity buffer explicitly "intended to support the payment of dividends on our preferred stock and interest on our indebtedness". The creation of a defensive reserve is itself a sentiment signal: the company is now managing for survival of its obligations, not just accumulation.
• 2026 (defense): Raising STRC's dividend rate (11.25% → 11.50%) to defend the instrument's par price; Saylor publicly defending potential BTC sales; and the actual first BTC sale since Dec 2022 to fund a preferred dividend (Lens 8).

What they stopped saying: The triumphant "accretion" framing is muted; the new vocabulary is "asset coverage," "USD Reserve," "balance-sheet resilience," "stress scenarios." Management is now narrating downside protection, not upside compounding — the clearest tell in the whole file.

Lens 7 · Comps

Strategy is sui generis; the right comp set is "digital-asset treasury (DAT) vehicles," not software or even miners. Multiples below are `` where sourced and n/a otherwise (never fabricated). The relevant valuation metric is mNAV (price ÷ crypto-NAV), not P/E (the company is structurally loss-making under fair-value accounting).

P/E, EV/Sales, EV/EBIT, dividend yield, 5-yr ROE — n/a — not meaningful for MSTR: the company is intentionally loss-making under ASU 2023-08, pays no common dividend, and its "earnings" are a bitcoin-price derivative. The single comp number that matters is mNAV ~0.85x. The structural read: when the category leader — the most liquid, most sophisticated, lowest-cost-of-capital DAT — trades below NAV, the smaller, higher-cost ETH/SOL copycats are almost certainly in worse shape, because their accretion math broke first and harder. Strategy is the canary and the floor for the entire DAT trade.

Lens 8 · Stock-Price Catalysts (what moves MSTR >5%)

The pattern is unambiguous: MSTR is a leveraged bitcoin call with two idiosyncratic overlays — the premium/discount cycle and index-inclusion mechanics.

1. Bitcoin price moves — the dominant driver. MSTR is ~1.5–2x levered beta to BTC; >5% BTC days routinely produce larger MSTR moves in both directions. The June 2026 slide (BTC ~$64k, down post-Fed ) is the proximate cause of the current drawdown.
2. The premium/discount (mNAV) re-rating — the 2026 story. The collapse from ~2.5x to <1x compounded the BTC drawdown: holders lost on both the asset and the multiple. This is the catalyst that turned a bitcoin dip into an MSTR rout.
3. Capital-raise announcements. The $84B "42/42" plan (May 2025) and each preferred IPO moved the stock; in the premium era these were bullish (more accretion), but the market's reaction function has flipped — new issuance at a discount is now read as dilutive.
4. Index inclusion / exclusion — a discrete tail. MSCI's proposed "digital asset treasury" exclusion rule (exclude companies >50% balance-sheet in digital assets) threatened $2.8B–$8B of forced passive selling; MSCI shelved it in Jan 2026 but flagged a review — a live, unresolved tail risk. S&P 500 inclusion has been repeatedly denied (passed over for SanDisk, Nov 2025) — the Index Committee avoids pure-asset-exposure names. JPMorgan separately warned of index-removal risk. The legacy software business exists partly to argue Strategy is an "operating company" and dodge these rules.
5. The first BTC sale (June 2026) — a regime-change catalyst. Selling 32 BTC to pay the STRC dividend is tiny in size but enormous in signal: it is the bear thesis made manifest — when the premium is gone, the coupon gets paid by liquidating the asset, not by issuing premium equity.

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Phase C — Judge people & books

Lens 9 · Management

Michael Saylor — Executive Chairman, founder-archetype, the entire thesis. Track record: built MicroStrategy into a real BI company in the 1990s; survived a 2000 SEC accounting-restatement settlement (a known historical red flag); then in 2020 executed the most aggressive corporate-treasury bet in market history, converting a stagnant software firm into the world's largest corporate bitcoin holder. Quantified: turned a sub-$1B-cap software company into a vehicle that peaked above $100B in market value and amassed 845k+ BTC. He is a true believer and a once-in-a-generation capital-markets innovator — the STRF/STRC/STRK/STRD architecture is genuinely novel financial engineering.

• Tenure & skin in the game: Founder; controls majority Class B voting power (10 votes/share). Enormous personal and corporate bitcoin exposure — aligned with common holders on bitcoin direction, but the controlled-company structure means minority common holders cannot check him (see the Dodge litigation, Lens 10).
• Capital-allocation history: Singular and binary — all-in on bitcoin, financed by every instrument imaginable. In the premium era this created spectacular BTC-per-share accretion (74% BTC Yield in 2024). The question is whether the same playbook, run at a discount, destroys per-share value — early evidence (22.8% → 3.2% BTC Yield, first BTC sale) says the machine is now in reverse.
• Red flags: (1) the controlled-company governance with no minority check; (2) a strategy with no defined endpoint — "we have not established a specific target amount of bitcoin to hold" — i.e. it accumulates until it can't; (3) promotional/advocacy posture (Saylor is the most public bitcoin evangelist on earth, which blurs the line between CEO and asset-talker); (4) the 2000-era restatement in his history is a permanent caution flag on aggressive financial presentation, even though KPMG signs the current audit clean.
• Phong Le (President & CEO): Runs operations and the capital-markets execution; the institutional/operational counterweight to Saylor's vision. Competent steward of the apparatus, but Saylor sets strategy.

Verdict on management: Visionary, aligned on bitcoin, structurally unaccountable to minority holders, and running a strategy that works beautifully on the way up and is untested-to-dangerous on the way down. You are not buying a management team that will pivot — you are buying Saylor's conviction that bitcoin goes up enough to outrun the cost of the leverage.

Lens 10 · Forensic Red Flags

As a forensic analyst, the accounting is — surprisingly — clean; the risk is structural, not fraudulent.

• Revenue recognition (software): Standard ratable subscription/support; the cloud-transition shift from upfront to ratable is disclosed and ordinary. No flag.
• The bitcoin mark (the big number): Under ASU 2023-08 (adopted Jan 1 2025), BTC is carried at fair value with changes through the income statement — this is more conservative/transparent than the old cost-less-impairment model. The $5.4B FY2025 and $14.46B Q1 2026 unrealized losses are honest mark-to-market, not earnings management. No flag on the accounting per se — but it makes GAAP earnings a pure bitcoin derivative.
• Deferred tax dynamics (a real, disclosed risk): DTL of ~$2.42B on unrealized BTC gain at YE2025; now that BTC is below cost basis, that reverses to a deferred tax asset requiring a valuation allowance against all US federal/state DTAs — management flagged this itself as a potential material non-cash hit. Watch this in the next prints.
• Leverage / coverage (the actual forensic concern): ~$8.2B convertibles + a perpetual-preferred stack with ~$0.9B/yr cash dividend run-rate, serviced by a software business that doesn't cover it and a $2.25B USD Reserve = ~2.5 years of dividend coverage funded by selling equity. Cash flow diverges from "earnings" by design; the genuine question is liability coverage in a sustained BTC bear, not accrual quality.
• SBC / dilution: Real ongoing dilution (weighted shares 256M → 334M YoY); flattered nothing, but it is the slow leak in BTC-per-share.

Regulatory findings (required):

• SEC Litigation Releases / AAERs: None. Verified via SEC EDGAR EFTS (LR + AAER) for 2021-06-21 → 2026-06-21 — total SEC findings = 0.
• 10-K Item 3 (Legal Proceedings):
• Shareholder action — Dodge v. Strategy (Delaware Court of Chancery, filed July 21, 2025): Purported class action by common holder David Dodge alleging the company violated DGCL Section 242 by not permitting common stockholders to vote on the STRK Amendment (filed July 7, 2025), plus breach of fiduciary duty. Seeks to void the STRK Amendment and unspecified damages. Outcome unpredictable; a direct flag on the governance/controlled-company risk — minority holders litigating because they had no vote.
• Brazil subsidiary procurement matter: Leniency agreements with Brazilian authorities (CADE/CGU/AGU/CGE-SP), aggregate cash ~$1.5M, immunity granted; immaterial.
• Non-SEC enforcement (web): No material FTC/DOJ/FDA/CFPB actions surfaced.
• Net: No accounting-fraud findings; the live legal exposure is the Dodge governance suit, which is thematically the most important — it is the minority-holder-vs-controller risk crystallized in court.

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Phase D — Project & stress-test

Lens 11 · Forward Projection

Conventional EPS projection is not meaningful for Strategy — GAAP "EPS" is a leveraged function of the bitcoin price (Q1 2026 LPS $(38.25) was 100% a BTC mark). Projecting it = projecting BTC, which I will not fabricate. Instead, the analytically honest forward frame is NAV-per-share and coverage under bitcoin scenarios, all `` with arithmetic shown.

Inputs: ~845,256 BTC (June 7 2026); ~$8.2B convertibles; ~$0.9B/yr preferred dividends; $2.25B USD Reserve; ~334M diluted common shares (rising); spot BTC ~$64,227 (June 21 2026); spot MSTR ~$112.5 (~0.85x mNAV).

Bitcoin NAV scenarios (gross BTC value, before debt/preferred claims):

The decisive forward variable is not EPS — it is whether the mNAV discount persists.

• If discount persists (<1x): every equity raise is dilutive to BTC-per-share, BTC sales fund coupons, BTC Yield stays near zero or negative → the vehicle slowly decays toward (or below) NAV, and the leverage works against holders. The ~$0.9B preferred coupon is the metronome of the decay.
• If premium returns (>1x, requires a BTC rally + restored confidence): the accretion engine restarts and MSTR re-rates violently higher (the bull case). This is entirely bitcoin-and-sentiment dependent.

No forecast.ts forecast logged — per --watchlist rules (and there is no honest standalone EPS line to commit to; the scoreable variable is BTC price, which is exogenous). A trackable proposition for later: "MSTR mNAV ≥ 1.0x by 2026-12-31" — currently I'd put p ≈ 0.35.

Lens 12 · Bull vs Bear

Bull case. Strategy is the only liquid, institutional-grade way to hold leveraged bitcoin inside an equity wrapper, with a capital-markets machine no one else has built. If bitcoin resumes its secular climb (halving cycle, sovereign/institutional adoption, debasement trade), MSTR's ~1.5–2x beta plus a returning premium produces explosive upside — the Street's $320+ targets (high $570) price exactly this. The preferred stack is non-dilutive leverage; the $2.25B USD Reserve buys ~2.5 years of runway; 23 consecutive preferred payments show the machine works. Saylor's conviction and control mean no wavering. In a bull tape, you want the most-levered, most-liquid bitcoin vehicle — and that is MSTR.

Bear case (2–3 permanent-impairment risks).

1. The discount becomes structural (the death-spiral mechanic). At <1x mNAV, the accretion flywheel runs backwards: raising equity destroys BTC-per-share, so the company sells bitcoin to pay perpetual coupons (already happening, June 2026). A prolonged BTC bear + persistent discount forces ever-larger BTC sales → fewer BTC backing more claims → wider discount. This is the scenario that permanently impairs holders even if bitcoin merely stagnates.
2. The fixed obligations don't care about the bitcoin price. ~$0.9B/yr preferred dividends + ~$8.2B convertibles (first puts 2027–2028) are contractual; bitcoin pays no yield and the software doesn't cover them. In a frozen capital market (BTC craters, MSTR craters, preferred ATMs stall), the company faces forced selling at the worst price.
3. Index exclusion tail. A reinstated MSCI "digital asset treasury" rule or continued S&P exclusion caps the buyer base and risks $2.8B–$8B of forced passive selling.

Pre-mortem (18 months out, thesis broke): Bitcoin chopped sideways-to-down through 2026–2027 in a higher-for-longer rate regime; the mNAV discount never closed; STRC's rate ratcheted higher to defend par, raising the coupon burden; the USD Reserve drained and BTC sales became routine; a convertible put date (Sept 2027 / 2028) forced either cash repayment or heavy dilution; MSTR converged toward NAV and the premium-era holders were left with a levered, decaying bitcoin position trading below the bitcoin it owns.

Are multiples too high? The stock is at a discount (0.85x NAV), so on a pure-asset basis it is "cheap." But that discount is rational: it prices the leverage, the perpetual coupon drag, the dilution, and the broken accretion engine. The asset is cheap; the structure deserves the discount.

Contrarian view (what the market refuses to see): Both sides are anchored wrong. The sell-side ($320+ targets, Strong Buy) is anchored to the old premium-flywheel model that no longer functions at a discount — those targets implicitly require the premium to return, which they don't justify. The bears calling "death spiral" underweight that the USD Reserve + 2.5-year runway + Saylor's control mean the unwind, if it comes, is slow and orderly, not a 2022-style implosion. The truth the tape is quietly telling you: MSTR has already transitioned from a premium compounding vehicle to a discounted, leveraged closed-end bitcoin fund — and it should now be valued like one (NAV ± a leverage-adjusted discount), not like a growth equity.

Lens 13 · Devil's Advocate (short-seller)

Dismantling the bull case.

• What structurally breaks the model: The premium. The entire edifice was justified by issuing stock above NAV. At <1x, the core value-creation mechanism is not just gone — it is inverted. Issuing equity now subtracts BTC-per-share. The bull case requires the premium to return, which requires a bitcoin rally, which is exogenous — so the "moat" is just a levered BTC bet with extra coupon drag.
• Revenue/asset concentration: ~100% of economic value is one asset — bitcoin — held at three custodians. There is no diversification, no hedge, no operating cash flow to cushion. A single custodial failure or a sustained 50% BTC drawdown is existential in a way it never is for a normal operating company.
• Why the moat is weaker than bulls think: "First-mover scale" doesn't protect against the math of a discount. And the capital-structure cleverness cuts both ways — the non-dilutive preferred is senior to common; in liquidation, preferred + convertibles claim the bitcoin first, so common holders are the most-subordinated claim on a volatile asset. The "amplification" works in reverse on the downside.
• Most dangerous competitor bulls underestimate: Spot bitcoin ETFs (and bitcoin itself). Why pay a premium — or even hold the leverage/coupon risk — for indirect BTC exposure when IBIT/FBTC give clean, cheap, liquid spot exposure? As ETFs matured, MSTR's reason-to-exist (the only way to get BTC in a brokerage) eroded, which is why the premium compressed. The competitor isn't another DAT; it's the frictionless ETF that makes the wrapper redundant.
• Worst capital-allocation / governance: No minority check (controlled company); the Dodge suit alleges common holders were denied a vote on a preferred amendment; no defined bitcoin target (accumulate-until-you-can't); raising the STRC coupon to 11.50% to defend par is paying more to hold the structure together.
• Assumptions that must hold for $112: (1) continuous capital-markets access; (2) BTC doesn't sustain a deep bear; (3) the discount doesn't widen into a self-reinforcing spiral; (4) no index-forced selling; (5) convertible puts (2027–28) get refinanced, not cash-called.
• If growth (BTC Yield) disappoints by 20–30%: It already has — 74% → 22.8% → 3.2%. The market response was the mNAV collapse. Further disappointment converges MSTR to (or below) NAV.
• Single scenario that permanently impairs: A multi-quarter BTC bear combined with a persistent discount that forces routine BTC sales to service ~$0.9B/yr of coupons — the holder ends up owning a shrinking pile of bitcoin, levered, at a discount, with the most-junior claim. Plausibility in a higher-for-longer rate world: uncomfortably non-trivial.

Lens 14 · Management Questions (ordered by information value)

1. At a sub-1.0x mNAV, every common-equity raise is dilutive to bitcoin-per-share. What is your explicit policy for issuing common stock below NAV — will you stop, and if not, how is that not value-destructive to common holders?
2. You sold bitcoin for the first time since 2022 to fund a preferred dividend. At what BTC price / coverage threshold does selling bitcoin to pay coupons become the primary funding source, and what is the maximum annual BTC liquidation you would tolerate?
3. The USD Reserve is ~2.5 years of preferred coverage and is funded by selling equity. If the discount persists so equity issuance is uneconomic, what is the plan to refill it — and what happens in year 3?
4. The preferred dividend run-rate is ~$0.9B/yr and growing. What is the maximum sustainable preferred dividend burden as a multiple of software operating cash flow before the structure is unsound?
5. The 2027 and 2028 convertible put dates total billions. In a scenario where MSTR trades below conversion and capital markets are tight, how are those puts funded — cash, dilution, or BTC sales?
6. You raised STRC's rate to 11.50% to defend par. What is the ceiling — at what cost of preferred capital does the instrument stop being accretive to the strategy?
7. If MSCI reinstates the digital-asset-treasury exclusion, how do you absorb $2.8–8B of forced selling, and what is your contingency to retain index eligibility?
8. With no stated bitcoin target and accumulation funded by senior claims, how do you protect the most-subordinated holders (common) from being diluted in BTC-per-share terms indefinitely?
9. The Dodge suit alleges common holders were denied a Section 242 vote. How do you reconcile the controlled-company structure with minority-holder protection going forward?
10. Spot bitcoin ETFs offer clean, cheap BTC exposure. What is MSTR's durable reason to exist for an investor who can simply buy IBIT — beyond leverage they could obtain elsewhere?
11. The deferred-tax position reverses into a DTA + valuation allowance now that BTC is below cost. Quantify the potential non-cash earnings impact over the next several quarters.
12. The software business is in structural license/support decline. Is it strategic, or is it a regulatory artifact kept to preserve "operating company" status — and would you ever divest it?
13. Under what board-defined conditions would Strategy ever deleverage — repay convertibles, redeem preferred, or pause accumulation — rather than always adding?
14. What is the single bitcoin-price-and-duration scenario your stress tests show as a solvency threat, and how close are current spot levels to it?
15. Succession: the thesis is inseparable from Michael Saylor. What is the plan if he is unable to serve, given his controlling voting stake?

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