The two largest publicly traded companies holding Bitcoin, Strategy (MSTR) and MARA Holdings (MARA), have both fallen about 40% in the past six weeks.
MSTR’s correction was widely reported by CoinDesk Research, but MARA, which is down 55% year-over-year, has also drawn attention as some investors consider it cheap at current levels.
Matthew Sigel, director of digital asset research at VanEck, believes that the data does not support the view that MARA is cheap. Siegel believes the company is actually trading at a premium to its Bitcoin holdings, rather than at a discount.
Sigel highlighted MARA’s outstanding convertible debt of $3.3 billion, compared with its Bitcoin holdings of $4.9 billion. After adjusting for convertible debt, before accounting for any additional liabilities generated by the mining operations, Bitcoin’s net worth is left at just $1.6 billion.
By comparison, the stock has a market capitalization of $4.7 billion, and Sigel suggested that once debt is factored in, MARA is actually trading at a premium rather than a discount to its Bitcoin holdings.
Sigel also addressed MARA’s high short interest issue, which currently stands at 27%. After adjusting for delta hedges related to the company’s convertible notes, Sigel estimates real short interest fell to about 15%, a 44% reduction.
Sigel contrasted this with MSTR, which has more than $8 billion in convertible debt and a market capitalization of $53 billion.
Once the hedge-related shorts were removed, short interest in MSTR fell by only 31%, or about 9 million shares. Sigel believes short interest in MARA is more structural, while he believes short interest in MSTR is more fundamental-driven.
Sigel believes that more than half of MARA’s stock movements stem from its capital structure and funding dynamics rather than pure Bitcoin beta. He concluded that MSTR offers cleaner Bitcoin duration exposure, while MARA’s mining equity performance is dominated by what he calls a questionable capital structure.
