MicroStrategy STRC preferred stock seen 13% undervalued by ex‑Goldman

MicroStrategy’s STRC preferred shares are quoted at roughly $85.29, about $11 below the $96.30 fair‑value estimate presented by former Goldman Sachs credit analyst Khing Oei, implying a 13% mispricing that could affect dividend‑seeking investors【2】.

Valuation method and dividend dynamics

Oei, who spent 25 years valuing risky debt at Goldman Sachs, treats STRC like a bond, discounting the actual cash it can pay rather than the headline 12% dividend divided by price. He notes that STRC’s dividend is not guaranteed forever; it pays only while MicroStrategy can afford it, and the company has no obligation to redeem the $100 face value. Using a 12% discount rate, Oei calculates a present value of $96.30, which aligns with his own spreadsheet and BeInCrypto’s verification【2】. By contrast, the market price of $85.29 reflects only about 17 years of dividend payments, versus the 29 years Oei’s model supports if Bitcoin holdings remain stable【2】.

Underlying asset base and dividend sustainability

MicroStrategy’s balance sheet shows 843,775 BTC worth roughly $54 billion and $3 billion in cash. After senior debt and senior preferred claims of $8 billion, about $50.2 billion backs the preferred shares, supporting an annual dividend bill of $1.73 billion【2】. Oei argues that even if Bitcoin price were flat, the dividend fund would last 29 years; a modest 3.4% annual Bitcoin growth would make the payouts effectively perpetual【2】. The current 14% yield shown by the market assumes the dividend continues indefinitely, a premise Oei disputes because the preferred shares have no maturity and can be suspended if cash runs low【2】.

Market sentiment and price drivers

The STRC price fell 25% below its $100 par value during June’s Bitcoin sell‑off, inflating the yield figure and prompting Oei’s critique【2】. A BitcoinTreasuries survey indicated that more than half of holders bought the dip, suggesting some market participants share Oei’s view of undervaluation【2】. Future price movement is tied closely to Bitcoin’s trajectory: Oei’s model projects STRC reaching $100 if Bitcoin climbs to $80,000, while a drop to $40,000 would push STRC down to $58【2】. Additionally, each $1 billion of new cash reserves could add about four points to STRC’s price, and a share buyback could contribute another five points, according to Oei’s estimates【2】.

What to watch

• Bitcoin price milestones: $80,000 (STRC ~ $100) and $40,000 (STRC ~ $58).
• Any new cash infusions or buyback announcements from MicroStrategy, each potentially adding 4–5 price points to STRC.
• Changes in dividend policy or suspension risk, which would directly affect the cash‑flow valuation.

The core question remains whether the market’s discount reflects genuine dividend risk or an overly pessimistic view of MicroStrategy’s asset base. As Bitcoin’s price evolves and MicroStrategy’s cash position changes, the gap between $85 and $96 could narrow—or widen—providing a real‑time test of Oei’s cash‑flow model.