A former Goldman Sachs credit investor is calling MicroStrategy's STRC preferred stock overvalued — or rather, undervalued by the market. Khing Oei claims the shares are mispriced by about 13%, with his own valuation at $96 versus the current market price near $85. The stock pays a 12% dividend, but Oei argues the yield calculated from that dividend is misleading because the payments aren't guaranteed forever.
How Oei values STRC like a bond
Oei treats STRC as a bond, counting expected cash flows. If Bitcoin stays flat, he calculates the dividend payments would last 29 years. At a 12% discount rate, that gives STRC a value of $96.30. The key: MicroStrategy doesn't have to pay the dividend if it can't afford it — so the 12% yield only holds as long as the company keeps buying Bitcoin and the price doesn't tank.
The Bitcoin math behind the model
MicroStrategy holds 843,775 Bitcoin worth about $54 billion, plus $3 billion in cash. Debt and senior preferred shares claim $8 billion, leaving $50.2 billion backing the preferred shares. The annual dividend bill for STRC is $1.73 billion. Bitcoin only needs to grow 3.4% per year for dividends to continue indefinitely, Oei's model shows. That's a modest bar — but not a guarantee.
What could move the price
MicroStrategy has levers to support STRC. It already raised the dividend rate from 9% to 12% since listing in July 2025. Holding cash reserves helps: each $1 billion adds about four points to value. Buybacks could add about five points. A BitcoinTreasuries survey found over half of STRC holders bought the dip below par, suggesting many are betting on a recovery.
The bear case and a conflict
Economist Peter Schiff predicted Bitcoin could crash toward $20,000, which would put MicroStrategy's $64 billion Bitcoin bet in question. Oei's own model shows STRC would return to $100 par value if Bitcoin reaches $80,000, but would drop to $58 if Bitcoin falls to $40,000. Oei runs Treasury, a European Bitcoin treasury firm, which may create a conflict of interest in his analysis — he's not exactly neutral on Bitcoin's prospects.
The unresolved question: can MicroStrategy keep paying that $1.73 billion annual dividend if Bitcoin growth stalls? Oei's model says yes for 29 years if Bitcoin stays flat. But flat is a big if.
