MicroStrategy has revised how it reports Bitcoin holdings tied to its stock, revealing that a significant portion of its massive Bitcoin stash is already claimed by lenders and preferred investors, not regular shareholders.
The company owns around 843,775 Bitcoin, the largest amount held by any publicly traded firm, valued at about $58 billion on its live dashboard. However, about $22 billion of this is owed to lenders and preferred investors, leaving roughly $36 billion in Bitcoin truly available to common shareholders. MicroStrategy now refers to this figure as its net reserve.
Debt’s Role and Market Impact
This financial restructuring comes after MicroStrategy took on substantial debt to expand its Bitcoin holdings, as detailed in its Digital Credit framework released earlier this year. The company also trialed these new metrics during a recent debate on how it should present its Bitcoin-related data.
But servicing this debt and preferred stock costs the firm approximately $1.8 billion annually in interest and dividends. To cover these expenses, MicroStrategy maintains a cash reserve established in December.
The updated metrics introduce an amplification ratio of about 1.53 times, indicating that when Bitcoin's price rises, shareholders benefit more, but they also face steeper losses during downturns. This pattern appears clearly in the stock's performance, which has plummeted 77% over the past year, significantly outpacing Bitcoin's 45% drop.
MicroStrategy also adjusted its mNAV value measure, which now compares the stock price to Bitcoin remaining for shareholders. The mNAV recently hit 1.00x, signaling that the previous premium on the stock relative to its Bitcoin backing has vanished.
According to founder Michael Saylor, these changes provide a clearer financial language for Bitcoin capital markets, as previous reporting obscured the fact that Bitcoin acquired through borrowing might never fully benefit common shareholders. Shareholders can now transparently see what share of Bitcoin they effectively hold, considering existing debt obligations.
Bitcoin’s price hovered near $65,136 at the time of writing, down around 1.4% that day. The updated disclosures clarify that losses affect shareholders first when Bitcoin declines, determining who ultimately bears the risk.
Despite these reporting changes, MicroStrategy’s strategy remains unchanged: it continues to acquire Bitcoin while prioritizing repayments to lenders and preferred investors.
