Consider the moment when the market tells you that a 12% annual dividend is only worth 17 years of payments, but a former Goldman credit veteran’s model says it should be 29. That is not a glitch in the matrix; it is a human judgment gap, and it sits at the intersection of Bitcoin maximalism, corporate finance, and the uncomfortable truth that 'Code binds, but people break or build'.
The asset in question is MicroStrategy’s STRC preferred stock—a $100 par, 12% yield instrument backed by the company’s 843,775 Bitcoin. As of early April 2025, STRC trades at roughly $85, a 15% discount to its face value, implying the market fears dividend suspension within the next two decades. But Khing Oei, a former Goldman Sachs credit investor, argues that the market is mispricing STRC by 13%—his discounted cash flow model pegs fair value at $96.30. The gap is not small change: with approximately 10 million shares outstanding, that 13% represents over $1.1 billion in perceived mispricing.
Yet as a Web3 community founder who has watched dozens of projects confuse market sentiment with fundamental value, I see a deeper narrative beneath the numbers. STRC is not a smart contract; it is a legal contract. It is not a decentralized protocol; it is a bet on one man’s conviction. And the very fact that a traditional finance veteran is analyzing it through a DCF lens signals something we in the crypto space rarely discuss: the culture of trust is migrating, but it is landing on people, not code.
The Anatomy of the Mispricing
Oei’s model is elegant in its simplicity. He takes MicroStrategy’s current cash holdings ($3 billion), its Bitcoin stash (843,775 BTC at ~$84,000 each, worth over $70 billion), subtracts the senior obligations (including $9 billion in convertible notes and $105 billion in preferred stock liquidation preference), and arrives at a net asset value cushion of $50.2 billion for the common equity and the preferreds. Then he runs a cash flow test: the company pays $1.26 billion annually in dividends on the STRK and STRC series. With $3 billion cash, it can cover two years of dividends without selling a single Bitcoin. If Bitcoin stays flat, the company has enough cash flow from its software business and BTC yield (via staking-like activities) to sustain dividends for 29 years. If Bitcoin grows at just 3.4% annually, the company can pay dividends indefinitely because the value of the BTC pile increases faster than the dividend outflow.
The market, on the other hand, is pricing STRC at $85.29, which implies the dividend stream is worth only 17 years of payments at a 12% discount rate. Oei calls this an error: “Never take this year’s coupon and divide by today’s price—that’s not yield, that’s a misleading number.” He points out that the so-called 14% yield (12% coupon divided by $85) is meaningless because the bond is perpetual: the principal is never repaid, so the only real return is the dividend stream. His model uses a 12% discount rate (reflecting the risk of bankruptcy or BTC collapse) and finds a present value of $96.30.
But here is where my skin crawls a little. As someone who spent 2017 auditing 50 ICO whitepapers and found only 12 with viable economic models, I learned that the most alluring numbers often hide the most fragile assumptions. Oei’s entire thesis rests on two pillars: (1) Bitcoin's price will not fall below $40,000 for an extended period, and (2) Michael Saylor will not change course. The second pillar is the one the market is mispricing, in my view.
The Real Risk Isn't Bitcoin—It's the Absence of Decentralization
'Trust is the only currency that matters,' I often say in my community calls. For STRC holders, that trust is placed entirely in the hands of one executive and a board that has shown unwavering loyalty to the Bitcoin strategy. The preferred stock has no voting rights. The common stock (MSTR) is controlled by Saylor with a significant personal stake. There is no smart contract enforcing the dividend; there is only a corporate board resolution that can be reversed with a 30-day notice. The governance is as centralized as it gets in the public markets.
In the crypto world, we talk about 'immutable code' and 'trustless systems.' STRC is the opposite: it is entirely trust-reliant. Oei’s model assumes that management will continue to prioritize dividend payments, will not dilute STRC holders by issuing more senior claims, and will not face a liquidity crisis if Bitcoin drops to $30,000. But history teaches us that centralized decision-makers break promises when incentives realign. I remember the DAO attacks of 2016, the multi-sig failures of 2020, and the countless projects where the 'community' had no real power because the admin keys were still in a founder’s wallet. STRC is no different—it is a multi-sig with a single human signer.
‘Culture eats blockchain for breakfast,’ and the culture at MicroStrategy is a cult of personality around Saylor. That culture has created enormous value—the company’s Bitcoin holdings are now worth over $70 billion, and the stock has outperformed every major asset. But it also creates an existential risk: if Saylor were to step down, sell the Bitcoin, or even announce a strategic shift, the entire STRC valuation could collapse to its liquidation preference (which is $100, but only if the company is solvent and bought back at par—otherwise market price would plunge).
Where the Market Is Right and Where It Is Wrong
Let’s take Oei’s model at face value. It says STRC is worth $96.30, implying a 13% upside. But even if the market is wrong about the duration risk, it may be right about the tail risk of a human error. The sensitivity table Oei provides shows that at Bitcoin price of $40,000, STRC falls to $58—a 42% loss from the current $85. That is not a mispricing; it is a realistic worst-case. The market is effectively pricing an option on Saylor’s continued obsession with Bitcoin.
Moreover, the article notes that over half of STRC holders bought below par, meaning many are already underwater on their capital if the company never redeems at par (which it has no obligation to do). This is a behavioral signal: the marginal buyer is a yield-seeker who doesn’t care about principal return, but the institutional buyers who price DCF models are the ones setting the marginal price. The latter are currently skeptical.
I have seen this pattern before in crypto markets: during the 2022 bear, many staking derivatives traded at steep discounts because the market priced in protocol death, but the protocols survived. Yet in those cases, the protocols had smart contracts that enforced rules, community governance that could pivot, and multiple independent developers. STRC has none of that. It has a ticker on NASDAQ and 843,775 Bitcoins in a corporate wallet.
The Contrarian Angle: Is Oei Underestimating the Centralization Tax?
Oei is a credit veteran, and he sees the world through a lens of cash flows and solvency ratios. He is likely right that, on a pure balance-sheet basis, STRC is undervalued. But the market may be imposing a 'centralization discount' that his model does not capture. Just as we in crypto apply a premium for composable, trustless systems, we should apply a discount for black-box governance. STRC is a black box.
Consider this: the company could, at any time, issue another series of preferred stock with a higher coupon, diluting the asset coverage for existing STRC holders. It could also use the cash to buy more Bitcoin, increasing the exposure but also the volatility. The market has no recourse. This is the opposite of a DAO where token holders can vote on treasury management.
‘Code binds, but people break or build.’ In the case of STRC, the code is the legal contract. It binds the company to pay dividends when it is able, but the phrase 'when it is able' is a massive loophole. If MicroStrategy judges that it needs to preserve cash to avoid bankruptcy, it will suspend dividends. The 29-year cushion is a theoretical maximum under the unlikely scenario that the company never makes a mistake.
A Signal for the Broader Crypto-Finance Convergence
Oei’s analysis is not just about STRC. It is a portent of what happens when traditional finance starts pricing blockchain-adjacent assets. We are moving from a world where 'fundamental analysis' meant reading white papers to one where analysts build DCF models on corporate Bitcoin holdings. This is a sign of maturation, but also a trap. The next wave of institutional money will bring risk models that assume rational management and efficient markets. We know that markets are rarely efficient, and management is rarely rational.
During the 2021 NFT boom, I curated 'Art for Access,' which minted free NFTs for underrepresented artists. What I learned was that value emerges from community trust and utility, not from a balance sheet. STRC has utility as a yield-bearing Bitcoin proxy, but its trust is concentrated. That is not sustainable if the goal is widespread adoption.
Takeaway: The Future Belongs to Distributed Trust
Oei may prove correct short-term—as Bitcoin rallies, STRC could snap back to $96 or even $100. But the lasting lesson for the Web3 community is that we must build systems where trust is not personified. 'We are building the future, together' means that no single individual should hold the keys to a $1.1 billion mispricing. The market’s error is not about cash flows; it is about the assumption that a single human can forever prioritize shareholder interests over personal conviction or external circumstances.
As I write this, I am reminded of my 2017 whitepaper audits: the best projects had a clear separation between the founding team’s vision and the protocol’s rules. MicroStrategy has no such separation. STRC is a bet on Saylor’s consistency. The market is asking for a discount on that bet. Maybe that discount is the only rational thing about the price.
So the question I leave you with is: When will the market learn to price trust itself? Because until it does, we will keep seeing 13% gaps like this one—not due to inefficiency, but due to a fundamental mismatch between the promises of code and the fallibility of people.
