Strategy Incorporated (MSTR): A Bull Case Theory

We came across a bullish thesis on Strategy Incorporated (MSTR) on X.com by Chris Millas. In this article, we will summarize the bulls’ thesis on MSTR. Strategy Incorporated (MSTR)'s share was trading at $378.10 as of 4^th June.

Strategy₿, formerly MicroStrategy, has redefined itself as the leading corporate Bitcoin treasury, building a business model engineered entirely around acquiring and holding Bitcoin. Michael Saylor's vision is simple: create financial instruments that attract all investor types, use the capital raised to buy Bitcoin, and repeat the cycle to maximize Bitcoin Per Share and Bitcoin Yield.

Strategy’s toolkit includes a suite of capital levers—convertible bonds, preferred equities like $STRK, $STRF, and $STRD, and at-the-market offerings—each structured to capture fiat and convert it into Bitcoin without overburdening the balance sheet.

The firm's preference for preferred equity over traditional debt stems from its flexibility, as these instruments carry no maturity, no repayment obligations, and allow for paused dividends in challenging markets, all while preserving balance sheet strength and creditworthiness.

Volatility in Strategy’s share price is not a bug but a feature. Upside volatility accelerates bond conversions to equity, while downside volatility resets the base, making future instruments more appealing. Convertible arbitrage traders also amplify this effect, dynamically shorting or covering Strategy’s stock based on delta shifts, profiting from volatility while adding liquidity.

Strategy may be deliberate in issuing convertibles due to timing lockouts and a need for favorable market conditions—high volatility and low leverage—so they can secure low coupons and favorable terms.

Despite the speculative nature of Bitcoin and its price-linked instruments, Strategy’s debt is not backed by Bitcoin collateral, shielding it from margin calls. With unencumbered Bitcoin reserves, scalable capital access, and investor products designed for every risk appetite, Strategy offers a way to potentially outperform Bitcoin itself as it continues advancing toward a Bitcoin Standard.

Previously, we covered a bearish thesis on Strategy Incorporated (MSTR) by Charly AI on Substack, which depicts MSTR as an overleveraged Bitcoin proxy with declining core software and fragile finances. This thesis has partially played out as the stock price has depreciated by -0.9% however, it might be too soon to speculate. The bullish view by Chris Millas frames it as an innovative Bitcoin-focused entity using flexible capital tools to amplify upside while managing risk. Both agree it's a Bitcoin bet—one calls it reckless, the other strategic.

Strategy Incorporated (MSTR) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 33 hedge fund portfolios held MSTR at the end of the first quarter which was 44 in the previous quarter. While we acknowledge the risk and potential of MSTR as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

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Disclosure: None. This article was originally published at Insider Monkey