In Episode 28, True North episode 28: In this episode the crew breaks down MSTR’s capital stack, Saylor’s latest fixed income product creations, leverage analysis, and how digital yield products could reshape… Key discussion points include $mstr leverage, capital strategy, the capital stack, risk tiers, why $strd vs $strf. Market context: MSTR closed at $378.10 with mNAV at ~1.90.
Market Snapshot
- Date: 6/4/25
- MSTR Open/Close: $385.80 / $378.10
- Volume: 8,472,192 shares
- mNAV: ~1.90
- Market Cap: ~$105.62B
- U.S. Market Cap Rank: 94
- BTC Held: 580,955
Chapters
- 00:00:00 — Agenda: cue the music and NFA
- 00:03:25 — $MSTR leverage: BTC holdings, debt ratios, and over-collateralization
- 00:07:07 — Capital strategy: Strike/Strife ATMs, growth potential, and leverage expansion
- 00:09:30 — The capital stack: Structure, liquidation preference, and investment-grade terms
- 00:15:15 — Risk tiers: Pyramid mechanics and creditworthiness of BTC-backed instruments
- 00:16:50 — Why $STRD vs $STRF: Spread breakdown, market yields and pricing
- 00:23:12 — High yield appetite: STRD as a Bitcoin-native junk bond
- 00:28:50 — Institutional angles: How insurance, banks, and pensions fit $STRD in portfolios & market comps
- 00:37:00 — $STRF moat: Scale, BTC trust, and sustainable yield thesis
- 00:42:55 — Digital capital shift: Rethinking credit spreads, collateral risk & the power of liquidity
- 00:46:50 — Bear defense: Using Stride to defend NAV and disincentivize short pressure
- 00:52:48 — Bull thesis: Rising prices, credit rating catalysts and qualified dividends
- 00:58:50 — Portfolio fit: STRF/STRD as yield anchors in digital-first portfolios
- 01:01:31 — Collateral moat: STRF as benchmark BTC treasury product & investment grade quality analysis
- 01:07:35 — Assessing legitimacy: Trust, scale, perpetual BTC yield as must-haves
- 01:11:55 — Proof-of-reserves debate: Security, audit, and credibility issues unpacked
- 01:15:19 — New adopters: Surge in corporate Bitcoin treasury conversions expected
- 01:19:48 — Valuation clarity: Dan’s analysis of non-cumulative preferred stocks and MSTR dividend security
- 01:24:37 — Community recap: BTC Conference stories, meetups, and strategy culture
- 01:38:57 — Translating Bitcoin: meeting investors where they are to fuel adoption
- 01:42:10 — Pre-IPO BTC Treasury investing: Overview of reverse merger & SPAC strategies
- 01:53:00 — Moon math: mNAV expansion price predictions
- 01:57:10 — S&P 500 inclusion: review the latest status and push for September
- 01:58:50 — Final thoughts: Roundtable takeaways
Episode Summary
Key Themes: STRD launch; complete capital stack; premium-agnostic Bitcoin yield; fixed-income disruption; mNAV defense; credit-spread compression; treasury-company structures; Wall Street adoption.
The Coiled Spring
The episode examines the launch of STRD, or Stride, and why the panel views it as the final major piece needed to create a complete Bitcoin-backed capital stack. Strategy begins the episode with approximately 580,955 Bitcoin, more than $60 billion of assets, and a leverage ratio well below its stated target. Soleil characterizes the balance sheet as a coiled spring: Strategy has substantial capacity to add leverage, and the growing suite of preferred securities allows it to do so without waiting for ideal convertible-bond conditions or relying entirely on the MSTR common-stock ATM.
The Full Capital Stack
The panel explains the capital stack from safest to riskiest: convertible bonds, STRF, STRK, STRD, and finally MSTR common equity. STRF remains the “crown jewel,” offering a cumulative dividend and strong protections if payments are missed. STRK sits below it while adding a perpetual conversion option into MSTR. STRD is deliberately more junior and carries a noncumulative dividend, meaning Strategy could suspend a payment during an extreme period without owing it later. MSTR common shareholders absorb the most risk but retain the greatest exposure to Bitcoin’s upside.
A Bitcoin-Backed Junk Bond
At first glance, STRD appears inferior to STRF because both offer a $10 annual dividend at par while STRD lacks the same payment protections. That inferiority, however, is the point. STRD is designed to trade more cheaply and provide a higher effective yield, targeting investors willing to accept greater risk in exchange for greater income. The group compares it to a Bitcoin-backed junk bond, opening Strategy to a global high-yield market worth trillions of dollars. Jeff contrasts STRD’s transparent Bitcoin collateral with bonds issued by struggling companies such as satellite providers and legacy media businesses, many of which offer lower yields despite weaker collateral and less liquidity.
The Quadruple-Threat ATM
The preferreds together create what the panel calls a quadruple-threat ATM. Strategy can issue MSTR, STRF, STRK, or STRD depending on which security has the strongest demand. Every issuance adds Bitcoin to the balance sheet, which strengthens the collateral supporting securities above it. STRD issuance therefore benefits STRF and STRK holders by adding assets beneath their claims. Ben describes the preferreds as self-correcting products: ATM issuance may temporarily lower the price, but that raises the yield and attracts new buyers, allowing Strategy to return to the market repeatedly.
Defending mNAV With STRD
The most important function of STRD is its ability to defend MSTR during a bear market. If the common stock falls below one times mNAV, issuing common shares to buy Bitcoin would become dilutive. Selling Bitcoin to repurchase shares would violate Strategy’s long-standing commitment not to sell its holdings. STRD provides another option: Strategy could issue the higher-risk preferred and use the proceeds to repurchase discounted MSTR shares. That would reduce the share count, increase Bitcoin per share, and punish shorts attempting to drive the stock below the value of its Bitcoin. Dan describes this as the inverse of issuing common stock above mNAV—selling a claim at full value to repurchase Bitcoin exposure at a discount.
Premium-Agnostic Bitcoin Yield
This mechanism leads Mason to describe Strategy’s new capability as premium-agnostic perpetual Bitcoin yield. When mNAV is high, Strategy can issue common equity accretively. When the common is unattractive, it can issue preferreds. If mNAV falls below one, STRD can potentially finance buybacks. Strategy therefore has a mechanism for increasing Bitcoin per share across a much wider range of market conditions than it did previously.
Wall Street Moves In
The episode also places these developments inside a broader institutional shift. At the Bitcoin conference, the panel saw bankers, PIPE investors, custody executives, CFOs, and capital-markets professionals moving into the ecosystem. New Bitcoin treasury companies are using reverse mergers, SPACs, and PIPE financing to access public markets, although the group warns that investors must understand dilution, lockups, deal structures, and the limited public float before speculating on them.
The Ratings Catalyst
Strategy remains differentiated by scale, liquidity, financing flexibility, and its growing digital credit yield curve. A formal credit rating for STRF or the other preferreds could trigger a major repricing by allowing institutional fixed-income portfolios to purchase them. Meanwhile, lower interest rates, S&P 500 eligibility, and further Bitcoin appreciation could increase the efficiency of every ATM in the capital stack.
Main Takeaway: STRD gives Strategy a higher-risk fixed-income product that completes its digital credit stack, expands its addressable market, and potentially allows the company to generate Bitcoin yield or defend mNAV under nearly any market condition.