Obligations and Optionality: Strategy Retired Preferred Stock, BitMine Bought Back Common

Abstract

When the shares of a crypto treasury company trade below the value of the crypto assets it holds, buying back shares seems like the textbook remedy. In 2026, Strategy Inc. (MSTR) did not use it. It sold bitcoin in five sale windows, left a $1.0 billion common stock buyback unused, and repurchased no common stock; it repurchased only one series of preferred stock (STRC) and one convertible note issue. This short working paper argues that, in this case, fixed-yield obligations came first in how Strategy used its funds, and that how the discount is measured decides whether a common buyback is the remedy at all. Measured gross, as bitcoin value per diluted share before debt and preferred stock, Strategy sold $5.2 billion of common stock from July 6 to August 30, 2026 at 9% to 28% below gross NAV and spent only 7.2% of the proceeds on bitcoin. Measured net of debt and preferred stock, as Strategy has defined mNAV since July 23, 2026, the same stock traded at or slightly above NAV (the company reported 1.01x to 1.06x). As a contrast, BitMine (BMNR), whose fixed charges are small, bought back about 21 million common shares from July 14 to August 17, 2026. The paper states predictions that would falsify the argument. It rests on one main case and one contrast, so its findings illustrate the argument and do not test it. Working paper (version 1.0), not peer reviewed. Disclosure: the author holds a large, concentrated long position in Strategy (MSTR), including call options, and holds BitMine (BMNR) common stock. This paper was AI-assisted in parts of the data extraction, calculation and drafting; the author is responsible for the content. Nothing in this paper is investment advice.