How Strategy (MSTR) actually makes money (part 2)

This is a “part 2” of my previous post — “7 ways MSTR actually makes money” — you can read it here before checking this out (it will make more sense).

I’ve just listened to MSTR’s Q1 2026 earnings call and it’s clear that they will continue to thrive, evolve and become wildly successful. This post will touch on some of the highlights from the earnings call and why I think they will be so successful.

Their #1 goal is clear — increase “Bitcoin Per Share” (BPS)

Increasing BPS is their #1 priority (for good reason).

I touched on BPS in the last post, but it comes down to this: If you believe Bitcoin will outperform the US dollar (USD) over time, then increasing BPS is more important than focusing on the USD price of the company or short term stock price.

Bitcoin > USD

MSTR shareholders, bitcoiners and I obviously believe in this — I’ve written heaps of posts on why and how Bitcoin will succeed.

Basically any scarce, desirable asset outperforms USD without even trying — whether it’s land, beach-front property, gold, fine art, shares, ETF’s… Bitcoin is no different in this regard.

USD is being printed to oblivion because the central bank has no choice and every single country in the world has increasing debt (and therefore increasing interest repayments). Money printing and new debt creation is inevitable. This causes inflation (since the currency is being constantly debased).

Bitcoin cannot be printed, there will only ever be 21 million bitcoins (fixed supply), the supply issuance of Bitcoin is halving every 4 years, and the demand for Bitcoin is only increasing.

Infinite money printing of USD.

BTC = scarce and desirable.

BTC price beats USD always. Simple. Let’s move on.

Why BPS matters the most for MSTR

Only people who truly understand that BTC will go up over time will invest in MSTR. And so if MSTR increases BPS, it means MSTR will outperform BTC long term. If MSTR outperforms BTC long term, they will have a solid business model and will be wildly successful (BTC already does well — outperforming BTC is insane).

MSTR outperformance due to increasing BPS.

How does MSTR increase BPS?

To recap from the last post, they have two major ways.

1. Printing and selling digital credit (“Bitcoin bonds”) such as STRC and using the proceeds to buy BTC for their company treasury (increases BPS greatly — it’s “highly accretive” in bitcoin terms at all levels, but especially when BTC is trading low since they will fetch more BTC per dollar raised)
2. Printing and selling MSTR stock when MSTR is trading at a premium to their BTC holdings and using that to buy BTC (“BTC alchemy”) — this can be highly accretive when MSTR is trading at a high mNAV premium. You can learn more about mNAV premium on this post here.

A clear graph showing their commitment to maximising BPS.

What other ways can they increase BPS now?

From this earnings call, they have highlighted a few more strategies.

1. They are reducing their traditional convertible debt to focus more on selling digital credit (such as STRC) which when done right is also highly accretive in BPS terms (basically buying back stock / debt that is or will be owed)
2. Instead of using STRC proceeds to just buy BTC, if MSTR stock is trading a low enough mNAV premium they will use STRC proceeds to buy MSTR instead — they will buy whichever increases BPS the most!
3. They have pivoted from their stance of ‘never selling BTC’ to ‘selling BTC when it is advantageous for the company (and therefore MSTR shareholders) — and they explained this is when it defends or increases BPS the most. I’ll go through this now

MSTR’s principles. One of my favorite slides — very clear direction if you understand their business.

When and why would selling BTC be advantageous?

The first thing to get out of the way is that MSTR would probably rarely ever “need” to sell BTC. They are raising so much money from STRC.

To put it plainly — they owe preferred stock investors and lenders about $1.5 billion a year. Sounds like a lot… until you realize MSTR were able to raise $2 billion in 2 single business days using STRC! And demand for STRC is only increasing.

STRC has the highest returns relative to their volatility compared to any investment out there — it has high returns (11.5% tax deferred dividends), coupled with low risk and volatility (<3%).

… So why sell BTC ever?

Michael Saylor (Co-founder and Executive Chairman of MSTR) explained it quite well in the earnings call. They can pay out their dividends using their cash reserves, from selling STRC, from selling MSTR, or from selling BTC…

==> The goal is to maximise BPS

1. If they use their USD cash reserves to pay out their dividends, it decreases credit worthiness and increases risk (since they have less liquid USD cash reserves on their balance sheet).
2. If they use STRC to pay out dividends, it could be smart but there might be more cost effective ways to fund the dividends (that money might be better off buying BTC or MSTR if it increases BPS more).
3. If they sell MSTR to fund their dividends, it could be dilutive to shareholders in BPS terms if mNAV is trading low.

A clear graph showing that they can continuously increase BPS.

Benefit #1 of having the option to sell BTC: They can use BTC to buy back MSTR if MSTR is trading below 1 mNAV premium!

Selling BTC to buy MSTR when it is trading below 1 mNAV premium actually increases Bitcoin Per Share (BPS)! Too funny.

It means whether MSTR trades below 1 mNAV, at or above 1 mNAV it doesn’t matter — MSTR can actively and constantly increase BPS!

Basically, there’s less Bitcoin, but even less MSTR shares outstanding. This increases Bitcoin per share (BPS) for remaining shareholders.

Benefit #2 of having the option to sell BTC: Leveraging tax benefits = more revenue

Another benefit from selling BTC? It could be very cost effective because if they sell high cost BTC, they will get a tax benefit at the same time! This means more overall profit for the company.

Showing that selling high cost BTC has a tax benefit.

They also have 60 billion + USD in BTC. Selling 0.18% of their BTC (or less) to pay out dividends does nothing to them when they acquire billions worth of more BTC per year from all their other mechanisms combined.

Michael Saylor explained it this way: If a real estate investor has 1000 properties, sells 2 high cost properties to fund the cost of running business and uses the tax advantages, and their business acquires 200 more properties per year, is there any net harm done at all?

This is exactly the same principle.

Benefit #3 of having the option to sell BTC: Increasing credit-worthiness = attracts more investors and indexes such as the S&P500 inclusion

MSTR was very clear with the purpose of their earnings call — to show risk mitigation, credit-worthiness, strength in leadership, clear objectives and clear reasons why they will succeed.

MSTR had met all the criteria to join the S&P500 index for many quarters now, the only thing stopping them from being included was the opinion of the board. One of their major criticisms was MSTR’s statements of “never selling Bitcoin.” Now that MSTR have technically said they will sell bitcoin if it is advantageous to the company, the board’s confidence will be greatly increased.

MSTR doesn’t need to join the S&P500 for success — it will just accelerate it. MSTR is going to succeed with or without being included in that index.

MSTR is incredibly secure and credit worthy.

What does all of this mean?

Putting it all together, this is what this all means.

1. The more Bitcoin Per Share (BPS) increases, the higher the returns and outperformance of MSTR compared to investing in BTC
2. They are actively promoting and increasing sales of STRC, reducing traditional convertible debt, and reducing reliance on ‘diluting’ MSTR stock (especially at unfavourable times) as increasing STRC sales is the most accretive mechanism for BPS
3. They can now sell high-cost BTC to either pay out dividends, buy back MSTR stock if accretive, and reap tax benefits and allow more STRC or MSTR accretion to acquire more BTC — whatever increases BPS the most!
4. They can find ways to increase BPS no matter what is happening. STRC being this successful has really helped boost this machine.

TLDR — or another way of looking at it:

1. If MSTR’s mNAV premium is below 1, they can sell BTC to buy MSTR — Increased BPS
2. If MSTR’s mNAV premium is above 1, they can sell MSTR to buy BTC — Increased BPS
3. If STRC demand is high (at, around or above $100 USD), sell STRC to buy more BTC or MSTR (depending on what increases BPS more) — Increased BPS. Note: demand on STRC has been high for months and keeps growing! Who doesn’t want 11.5% tax-deferred cashflow dividends paid out monthly?
4. Because mechanisms #1, #2 and #3 above ^ all increases BPS, MSTR trades at a premium. Since mNAV premium goes up higher than 1, use mechanism #2 ^ even more to increase BPS.
5. If they do nothing and nothing happens, their 60 billion in BTC goes up on it’s own anyway (anywhere from 23%-30% a year on average).
6. Since MSTR trades at a premium, if BTC goes up by whatever %, MSTR will go up at the same % x the mNAV multiplier.
7. Since MSTR goes up at a multiplier, use mechanism #2 ^ to further increase BPS. Repeat forever!

Michael Saylor is an aeronautical engineer from MIT — it’s really showing that he has engineered such amazing financial products around BTC. All roads lead to MSTR having an increased Bitcoin Per Share (BPS). Super cool.

Some closing notes:

If BTC goes up by 0% they have 43 years to figure out what to do.

Because they have 818,334 bitcoins (currently worth $66 billion USD at this time of writing), if BTC increases by just 2.3% a year, they can payout their dividends forever.

If it outperforms 2.3%, they’re making CRAZY profits as this fuels all these mechanisms even more!

Obviously if you think BTC is toast, MSTR is mega toast!

Inflation is about 5–10% if you use your eyes and quick napkin math, rather than what your government or bank or “CPI” tells you.

BTC is going to absolutely smoke 2.3%!

MSTR is going to ABSOLUTELY RIP when BTC does.

Not financial advice! Please do your own research and speak to a financial advisor for investment advice!

Some more links:

• 7 ways MSTR actually makes money (part 1 of this post)
• “Bitcoin bonds” — explaining MSTR’s preferred stocks such as their most successful product: STRC
• Which MSTR preferred stocks would I buy?
• MSTR always wins no matter what mNAV premium it trades at