Model

The Retirement Trade

Strategy Inc (MSTR) · Digital Credit Capital Framework · $1B Authorization

Prices as of Jul 6-7, 2026. Static analysis at stated prices.

The Baseline · Neutrality Principle

Cash used to buy BTC is CEBE-neutral: dollar for dollar, the BTC gained equals the cash offset lost, so the net effect on common equity's Bitcoin position is zero.

Retirement of preferred below par is the only use of a treasury dollar whose accretion is contractual. The discount between market price and $100 face is a direct transfer from the claims stack to common equity, fixed at execution and independent of any market outcome. No other capital allocation produces this.

CEBE = (BTC − Net Senior Claims in BTC) / Basic Shares. Cash nets against claims. Spending cash increases NSC. Retiring face decreases NSC. The net benefit is the discount.

Per $1M Deployed · Four Series

Series	Mkt Price	Discount	Face Retired	NSC Reduction	BTC Freed	Sats/Share
STRC	$87.87	$12.13 (12.1%)	$1,138,045	$138,045	2.17	0.58
STRK	$61.46	$38.54 (38.5%)	$1,627,075	$627,075	9.87	2.66
STRD	$60.96	$39.04 (39.0%)	$1,640,420	$640,420	10.09	2.71
STRF	$96.29	$3.71 (3.7%)	$1,038,529	$38,529	0.61	0.16

NSC reduction is face retired minus cash spent. BTC freed at $63,500 EST. Sats/share against 371,614,000 basic shares. STRF at $96.29, Jul 7 Kraken close.

STRE is excluded: it lists on the Luxembourg Euro MTF, a professional-only market, and carries no reliable public quote.

STRK: conversion rate 0.1 MSTR per STRK, $1,000 effective conversion price per the Certificate of Designations (8-K Feb 5, 2025, Exhibit 3.1). Retirement permanently extinguishes a perpetual conversion option, no expiry. This structural benefit is not captured in the sats/share figure above.

STRK's liquidation preference floats: it equals the greatest of the $100 stated amount, the last STRK sale price, or the 10-day average closing price, per the Amendment 8-K of Jul 7, 2025 (acc 0001193125-25-155918). Below $100 the floor is active and the claim is fixed at face. As STRK's price recovers above par the claim floats upward, so the retirement discount narrows and the window closes as the stack heals.

Breakeven Surface · STRC Accretion by Purchase Price

Purchase Price	Discount	NSC Reduction / $1M	Sats/Share / $1M	Discount Width
$60	$40.00	$666,667	2.82	Very wide
$70	$30.00	$428,571	1.81	Wide
$80	$20.00	$250,000	1.06	Moderate
$87.87	$12.13	$138,045	0.58	← Current
$90	$10.00	$111,111	0.47	Narrow
$95	$5.00	$52,632	0.22	Thin
$100	$0.00	$0	0.00	Par, neutral. Same as buying BTC

Breakeven is par ($100). Below par is accretive, above par is dilutive. Zone labels describe discount width only, not valuation.

Full $1B Deployment at Jul 6 Prices · Static

Series	Shares Retired	Face	NSC Redux	BTC Freed	CEBE +sats	Div Saved/yr	% Float
STRC	11,380,448	$1,138.0M	$138.0M	2,173	+585	$136.6M	10.8%
STRK	16,270,745	$1,627.1M	$627.1M	9,875	+2,658	$130.2M	116.0%*
STRD	16,404,199	$1,640.4M	$640.4M	10,085	+2,714	$164.0M	117.0%*
STRF	10,385,294	$1,038.5M	$38.5M	607	+163	$103.9M	80.9%

*Exceeds outstanding float. Realistic deployment capped at available shares. STRK $1B also cancels 1,627,075 ADSO shares (conversion option retired).

The Buyback Mirror · Common Equity Repurchase Through the Residual

The issuance rule: equity sold above CEBE mNAV 1.0x adds residual per share. Equity sold below it subtracts.

The mirror: equity repurchased below CEBE NAV per share adds residual per share. Equity repurchased above it subtracts.

Same threshold. Opposite sides. The market price against CEBE NAV per share determines the verdict for both.

CEBE NAV per share: $91.40 · CEBE mNAV: 1.10x
MSTR close: $100.77 (Jul 6, 2026, MacroTrends)
BTC price: $63,500 (Jul 7, 2026, CoinGecko)

At 1.10x, issuance adds residual per share and buybacks subtract it. The buyback authorization becomes residual-accretive only below $91.40.

Threshold recomputes with BTC price and the claims stack. Figures at Jul 6-7, 2026 prices.

Case C construction credited to Adam Livingston, Jul 8, 2026 article.

$100M BTC-Funded Buyback · Worked Example

Sell 1,575 BTC at $63,500. Use $100M to buy back common shares at market. Claims ($19.62B) stay fixed. The BTC stack shrinks. The claims do not. Every BTC sold comes 100% out of common equity's share.

Buyback Price	Shares Retired	Residual (sats)	Residual Delta	Company Per-Share Figure	Toolkit Delta	Residual Verdict
$50	2,000,000	144,282	+353	227,859	+803	Accretive
$70	1,428,571	144,060	+130	227,508	+451	Accretive
$91 (NAV)	1,094,148	143,930	0	227,302	+245	Neutral
$100 (market)	1,000,000	143,893	-37	227,245	+188	Dilutive
$150	666,667	143,764	-166	227,040	-16	Dilutive

At $100, the company's per-share figure reads +188 sats. The residual reads -37 sats. Same transaction. Opposite verdicts.

The company's per-share construction cannot see that $19.6B in claims stayed fixed while 1,575 BTC left the stack. The denominator shrinks, so the figure improves. But the claims consume a larger share of a smaller reserve, and the residual declines.

At the neutral row ($91, CEBE NAV), the toolkit construction still reads +245 sats accretive. The gap between the two verdicts is the claims layer, made visible.

Same Dollars, Different Destination · $100M From BTC Sales, Two Uses

	Common Buyback (@$100)	STRK Retirement (@$61.46)
BTC after	842,200	842,200
Shares after	370,614,000	371,614,000 (unchanged)
Claims after	$19.62B (unchanged)	$19.45B (-$162.7M face)
Claims in BTC	308,912 (unchanged)	306,350 (-2,562 freed)
Common equity BTC	533,288	535,850
Residual sats/share	143,893	144,195
Residual delta	-37 (dilutive)	+266 (accretive)

Same 1,575 BTC sold. Sent to common buyback: -37 sats. Sent to STRK retirement: +266 sats. A 303-sat swing per $100M, decided entirely by destination.

Common buyback removes shares but leaves claims fixed. Preferred retirement removes claims (at a 38.5% discount to par) but leaves shares fixed. When the claims stack is $19.6B and the discount is 38.5%, the claims math dominates the share math.

The Toolkit View

The company's stated KPIs measure BTC per diluted share. Preferred retirement changes neither BTC nor diluted shares. By construction, the company's per-share figure impact of preferred retirement is zero, and its impact of a common buyback is positive. The toolkit rewards the buyback and ignores the retirement. The residual reverses that verdict at current prices. The KPI definitions and the STRK exception are covered under Toolkit Blindness below.

Toolkit Blindness

ZERO

Company KPI impact of retirement

ZERO

By construction: BTC and shares unchanged

"the KPIs do not take into account that the Company's assets, including its bitcoin, are subject to all of the Company's existing and future liabilities, including its debt, and the preferential rights of the Company's preferred stockholders."

Source: Strategy dashboard KPI definitions

Exception: STRK retirement reduces ADSO (conversion shares cancelled), so the company's per-share Bitcoin figure moves through the denominator. STRK is the only preferred retirement that touches the reported KPI at all.

The Allocation Tension · Two Seats, Two Priorities

From the company's seat

STRC-first. Restore par trading ($100 stated objective).

Reopen the STRC ATM engine, which generated $5.5B in 2025-2026. A functioning ATM at par funds BTC purchases. A broken ATM at $88 does not.

Source: Jun 29, 2026 press release (8-K acc 0001193125-26-286871): "Strategy's corporate objective is for STRC to trade over time in a range of approximately $99 to $100."

From the common shareholder's seat

STRK-first. 3.2x more CEBE-accretive per dollar.

Captures a 38.5% discount vs 12.1% for STRC. Also cancels the perpetual conversion option (0.1 MSTR per STRK, no expiry). Every STRK share retired is both a claim removed and a future dilution eliminated.

Both shown. Different questions. The 8-Ks will reveal which path Strategy chooses.

Measurement layer: the discount is the accretion.
Mechanics layer: the deployment path determines which claim shrinks.
Valuation layer: the allocation choice reveals what management optimizes for.

All prices Jul 6-7, 2026. Static analysis at stated prices. Face values from Q1 2026 10-Q and 8-K ATM chain.
BTC $63,500 for all conversions (Jul 7, 2026, CoinGecko). MSTR close $100.77 (Jul 6, 2026, MacroTrends). Debt $6,696,524,000 EST (pending Q2 10-Q). STRF $96.29, Jul 7 Kraken close, VERIFIED.
Buyback Mirror threshold recomputes with BTC price and the claims stack. Case C construction: Adam Livingston, Jul 8, 2026.
Source: 8-K Jun 29, 2026 (acc 0001193125-26-286871). STRK CoD: 8-K Feb 5, 2025, Exhibit 3.1. STRK liq pref amendment: 8-K Jul 7, 2025 (acc 0001193125-25-155918).

This page is measurement, not investment advice. Nothing here is a recommendation to buy or sell any security.

CEBE Framework by @chcbearsfan. cebetracker.io.