This company, which initially started with a software business and later transformed into a "Bitcoin reserve vault," is now aiming at the trillion-dollar corporate bond market under the name of "Strategic Company" (formerly MicroStrategy).
On Tuesday, Michael Saylor, the executive chairman of Strategic Company, introduced the latest financial engineering plan to the market: issuing $1 billion in preferred shares. He claimed this would usher in a "new era of Bitcoin-driven growth".
"We are now the world's largest Bitcoin-collateralized credit instrument issuer," Saylor said in a Bloomberg interview, "This means we can obtain financing without repaying the principal, only paying dividends."
The raised funds will be entirely used to acquire more Bitcoin.
What is the key mechanism? Saylor revealed: the company can discretionally suspend dividend payments.
A "Disturbing" Trend
Strategic Company currently holds 580,000 Bitcoins, valued at approximately $63 billion, while the company's market value is around $120 billion.
Strategic Company's plan is just a "disturbing" microcosm of the corporate Bitcoin adoption wave - from Japan's Metaplanet to the US's GameStop, more and more companies are getting involved.
History shows that claims of "perpetual rise" often ignore market realities.
— Eliezer Ndinga, 21Shares
Many enterprises are adopting similar strategies: issuing bonds, selling stocks, and then investing the funds into Bitcoin.
Even Donald Trump's media group wants a piece of the action.
Saylor's New Plan
Unlike previous financing through convertible bonds of billions of dollars, this preferred share plan operates quite differently.
Preferred shares are between debt and common stock. Similar to bonds, preferred shares typically pay fixed dividends and usually carry lower risk than common stocks.
However, debt has a clear maturity date (loan repayment period), while preferred shares do not.
Preferred shareholders typically do not have voting rights but enjoy dividend distribution priority over common shareholders.
Since preferred shares never expire, Strategic Company neither needs to repay the principal nor face refinancing or liquidation risks like traditional debt.
Trillion-Dollar Market
For Saylor, this is not just an innovative financing tool - but a direct challenge to the approximately trillion-dollar corporate bond market.
The bond market provides large-scale financing channels for companies, but traditional corporate bonds usually have fixed terms and refinancing risks.
In contrast, Saylor has packaged preferred shares as a perpetual financing instrument - never expiring, never needing repayment, and continuously providing funds for Bitcoin acquisitions. He claims the plan has no drawbacks.
"If we can issue preferred shares with a 10% yield while Bitcoin returns 57%, it means we're creating a 47% arbitrage space," Saylor stated, "which is essentially risk-free."
Valuation Reconstruction
Saylor hopes investors will break through the mindset of "valuing only based on Bitcoin holdings" and instead incorporate the company's continuous financing and ability to create excess Bitcoin returns into pricing considerations.
"To assess company value, one must calculate its ability to generate additional returns beyond Bitcoin holdings," Saylor emphasized. Currently, the market seems to agree with this logic - Strategic Company's $120 billion market value is 91% higher than its $63 billion Bitcoin holdings, which cannot be explained by its declining software business.
"Pure Financial Nonsense"
Critics point out: dressed up, but fundamentally different.
"This is absolutely pure financial nonsense," legendary short seller Jim Chanos wrote on X platform. He is shorting the spread between Strategic Company's stock price (currently around $384/share, up 32% this year) and its Bitcoin holdings value (nearly $63 billion).
Chanos's core criticism is Saylor's valuation logic: "Mr. Saylor wants you to value not just by his Bitcoin holdings' net value, but also apply a multiple premium to asset net value changes! Just because he can now leverage, ha!"
NAV (Net Asset Value) represents the book value of a company's held assets. When a premium occurs, it means the stock price is disconnected from the actual asset value. For example, Metaplanet, Strategic Company's Japanese imitator - as 10xResearch analysts point out, investors are pricing each share equivalent to $596,146 per Bitcoin, over five times its Bitcoin market value.
Risk Disregard
Chanos uses an analogy to point out its absurdity: If someone's house value rises from $450,000 to $500,000, but claims a 20x multiplier should be applied to the $50,000 appreciation, making the property valuation $1.5 million - this logic completely ignores the inherent risks of continuously leveraging Bitcoin acquisitions.
"No investment is truly risk-free, despite Michael Saylor claiming MicroStrategy's new preferred share plan is," Eliezer Ndinga, VP of Strategy at 21Shares, told DL News, "History proves that promises of perpetual rise often disregard market realities."
Since Strategic Company started its Bitcoin acquisition plan in 2020, despite Bitcoin's significant price surge, its net asset value has remained highly volatile.
Premium Inflation
However, the company's valuation premium continues to inflate. "Despite experiencing multiple boom and bust cycles, Saylor's 'infinite money glitch' strategy has not significantly altered MicroStrategy's net asset value since substantially buying Bitcoin in 2020," Chanos noted. Data shows that Strategic Company's current trading price is about 1.8 times its net asset value, compared to over six times its Bitcoin holdings value in 2020.
Will Saylor's grand vision of constructing a Bitcoin-priced capital market become an undeniable transformative force, or validate the short sellers' correct judgment? The only certainty is that Wall Street and its skeptics are closely watching this high-stakes gamble.
