Ex-Goldman Credit Analyst Says MicroStrategy’s STRC Preferred Stock Is 13% Under‑Priced

When a former Goldman Sachs credit investor points to a 13% pricing gap in a high‑profile Bitcoin‑linked security, the market takes notice. Khing Oei, who spent a quarter‑century assessing risky debt for Goldman and hedge funds, released a detailed valuation of MicroStrategy’s preferred share class STRC that suggests the stock should trade around $96, not the $85 level seen on exchanges.

Oei’s argument hinges on a simple but often‑overlooked principle: you cannot value a cash‑flow stream by dividing a single‑year dividend by today’s price. The popular 14% yield figure assumes the 12% dividend will continue indefinitely, regardless of MicroStrategy’s ability to pay. In reality, STRC’s payouts depend on the company’s cash reserves and the price of its 843,775 Bitcoin holdings, which currently sit at roughly $54 billion.

By stripping away senior debt and other preferred claims, Oei isolates the $10.5 billion pool that backs STRC. At a 12% discount rate, the projected $1.73 billion annual dividend sustains the share for about 29 years, producing a fair value of $96.30. The market price, by contrast, only reflects roughly 17 years of payouts, leaving a 13% mispricing that could reward investors who buy now and hold as the price converges.

This valuation has immediate market relevance. A BitcoinTreasuries survey cited in the original report found that more than half of institutional holders increased exposure after STRC slipped below its $100 par value in June’s Bitcoin sell‑off. The mispricing therefore acts as a de‑facto signal for institutional buying, potentially amplifying price pressure toward Oei’s target.

Beyond the immediate trade idea, the episode illustrates a broader shift in how technology‑driven automation is reshaping valuation workflows. Many firms now rely on algorithmic models that ingest market data and output price targets in seconds. Oei’s manual, bond‑style approach—counting actual cash that can be paid out—serves as a reminder that automated models can embed simplifying assumptions, such as perpetual dividends, that may mislead investors.

MicroStrategy itself has tools to influence the price trajectory. The company plans a $90 share listing for STRC in July 2025, already raised the dividend to 12%, and continues to add cash reserves. Each $1 billion added to the balance sheet, Oei estimates, lifts the fair value by about four points, while a buyback could add another five points. In effect, the perceived mispricing becomes a lever the firm can use to attract capital without issuing new equity.

Critics, however, caution against optimism. Economist Peter Schiff predicts Bitcoin could tumble to $20,000, which would sharply erode the asset base supporting STRC’s dividends. Moreover, Oei runs Treasury, a European Bitcoin‑focused treasury firm, creating a potential conflict of interest if the shares gain credibility.

For investors, the key questions are clear: Does MicroStrategy’s $57 billion asset base justify a $1.73 billion dividend bill, and how likely is Bitcoin’s price to sustain the cash flow needed for STRC’s payouts? The answer will shape not only the price of a single preferred share but also the appetite of institutional players for crypto‑exposed securities.

In the coming weeks, Bitcoin’s price movement and MicroStrategy’s cash‑management decisions will test Oei’s thesis. If the dividend stream holds and the price climbs toward $96, the 13% mispricing narrative could become a case study in how disciplined cash‑flow analysis outperforms headline yields. If the market’s caution proves correct, the discount may signal deeper concerns about the sustainability of crypto‑backed dividend structures.