Welcome to MSTR Motors.
Please ignore the word Micro hastily crossed out on the sign. Management assures us they are in fact well endowed.
Standing beneath the flashing marquee is Michael Saylor, wrapped in a gold suit and grinning like the greatest used-car salesman who ever lived. Behind him stretches a lot filled with strange contraptions: modern automobiles, brass polished and paint gleaming, retrofitted to be pulled by teams of horses. Every windshield carries a sticker promising LEVERAGED BITCOIN EXPOSURE.
There is only one problem: the engines have been removed.
They are stacked in a warehouse across town, controlled by institutional custodians. Customers receive shares in the dealership instead of keys to the cars. Two teams of horses are tethered to the fleet, an older team that has been there from the beginning, and a newer, hungrier team feeding at troughs marked STRF, STRC, STRK and STRD.
Above the lot hangs the company motto:
Not your keys. Not your coins. Not your problem!
Saylor spreads his arms.
"Why operate an engine yourself?" he asks. "Engines are loud, complicated, and dangerous. Let our institutional custodians hold the engines and the keys. We'll give you a certificate representing an indirect economic interest in the dealership."
The crowd oohs and aahs.
"And when you need the vehicle to move," he continues, gesturing toward the horses, "we have these fine preferred securities to pull it. They offer a smooth ride and a dependable yield."
Someone in the crowd raises a hand.
"What happens when the horses need to be fed?"
Saylor smiles.
"We sell an engine."
The car
When practical automobiles emerged in the late nineteenth century, they were commonly called "horseless carriages." The name made sense. The earliest cars borrowed much of their basic form and function from the carriages they replaced.
But the engine changed everything: offering enormous increases in speed, range and personal autonomy. It did not merely improve the horse-drawn carriage. It eliminated the horse from the equation.
The established order fought back. Britain's infamous "Red Flag Act" limited self-propelled vehicles to two miles per hour in towns and required a man to walk ahead carrying a warning flag, a law that tried to force the new machine to move at the speed of the system it was replacing.
It failed because the automobile was simply too useful. A car gave its owner freedom, power and autonomy that a horse-drawn carriage could not match.
Bitcoin is a similar step change. The opening promise of Satoshi Nakamoto's white paper was that payments could move "directly from one party to another without going through a financial institution."
Disintermediation is the engine.
Bitcoin is a bearer asset: permissionless, peer-to-peer electronic cash. It removes the bank, the broker, the custodian, the transfer agent and the corporate board; every intermediary standing between you and your money. What it does not remove is responsibility. It hands responsibility to the owner.
Like a car, Bitcoin requires you to learn how to operate it. You must control the keys, maintain the machine and drive like a responsible adult.
That is not a defect. That is the innovation.
Satoshi gave us the tool to free ourselves from financial slavery, from a debt-based financial system that enriches the few at the top at the expense of the many at the bottom.
Bitcoin is the financial vehicle that offers those who take the wheel freedom, power, and autonomy.
The engineering trick
Then Michael Saylor arrived.
He took the automobile, removed the engine and locked it in a custodian's warehouse, strapped a carriage to the roof, attached a team of horses to the front, wrapped the entire contraption in several classes of securities and called it financial engineering.
Here is what the engineering actually was. Saylor towed a fleet of engineless cars to the top of a steep hill, strapped some tired horses to the front of each, and sent them racing down. The hill, sloping down, was a rising bitcoin price and a market willing to pay a premium for the wrapper. As long as that premium held, Strategy could issue overpriced paper, buy more bitcoin with the proceeds, and increase the bitcoin behind each share. The rising stock attracted new buyers, who paid a fatter premium, which funded more issuance, which bought more bitcoin.
The cars flew downhill. Saylor stood beside the road taking credit for their speed.
"Look at these magnificent vehicles," he told investors. "Look what my engineering has accomplished."
But gravity was doing the work. Leverage does not create value; it multiplies whatever the market does to you. A sound vehicle carries its own propulsion. Strategy's vehicle had a favorable slope.
The flaw became visible when the cars reached the bottom of the hill.
Without gravity, they stopped.
The horses
The horses did not arrive with the preferred stock. They were hitched to the fleet from the start: Strategy's debt holders.
MicroStrategy issued its first bitcoin convertible notes in December 2020, $650 million at a 0.75% coupon, and kept going. Before the first preferred share existed, roughly $6.5 billion of note principal was outstanding.
They were accommodating horses. Some ate almost nothing; some carried no coupon at all. If MSTR rose far enough, the notes converted into common shares and the debt dissolved into dilution.
While the cars were flying downhill, the horses looked ornamental. But convertible noteholders hold senior claims, maturity dates and repurchase rights. A rising share price turns the debt into dilution. A falling one turns it into a bill.
And Strategy cannot pay bills from operations. The company says so itself: its 2025 annual report acknowledged that the software business does not generate positive operating cash flow and is not expected to generate enough to cover the company's obligations over the following year. At year-end, Strategy carried $8.25 billion of debt.
The dealership has no income to speak of. It can meet its obligations exactly four ways: attract new capital, refinance, dilute the common equity holders, or sell bitcoin.
That is not quite a Ponzi scheme. The securities are real and the debts are disclosed. But the cash-flow dependency is similar. A structure with no internal income that satisfies earlier claims out of new capital works precisely as long as the next buyer keeps arriving.
The cars were always hitched to horses. Gravity just let everyone forget.
Then the deal changed
When the flywheel stalled, Saylor did not let the leveraged trade unwind because it would have been egg on his face. He changed the team of horses.
Beginning in early 2025, Strategy stacked a family of perpetual preferred securities on top of the debt: STRK at an 8% cumulative dividend, then STRF, STRD and STRC at roughly 10% and up. By the first quarter of 2026, more than $13.5 billion of preferred equity was outstanding, and more than $693 million in distributions had already gone out the door.
Meet a second, hungrier team of horses. They must be fed in all weather. The dividends are payable when bitcoin rises and when it falls, when the premium is fat and when it is gone. Several carry cumulative dividends that accrue if unpaid, while even the non-cumulative issues depend on continued payments to preserve investor confidence and market access.
The people who bought MSTR as a leveraged bitcoin play now sit at the bottom of a capital structure very different from the one they believed they were buying into: debt holders first, preferred holders second, and the common dead last, beneath billions in claims that must be serviced before a dollar of value reaches them.
Saylor sold them an automobile without an engine. When it stopped rolling, he hitched on new horses, promised to feed them first, and seated their owners ahead of the passengers.
Then he started selling the engines to buy hay.
Selling the engines
"Never. No. We're not sellers. We're only acquiring and holding bitcoin." โ Michael Saylor, January 2022.
He repeated it for years, in every register. Bitcoin was a "permanent treasury reserve asset." And in February 2026, on CNBC, clearly speaking of his company: "We're not going to be selling; we're going to be buying Bitcoin."
Three months later, Strategy sold.
Between May 26 and May 31, 2026, Strategy sold 32 BTC to help fund preferred distributions. Trivial against the hoard and explained away as simply Strategy proving that Bitcoin was liquid.
Weeks later, the company announced a formal "BTC monetization program" authorizing up to $1.25 billion in bitcoin sales to cover preferred dividends, debt interest, reserves and buybacks. Days after that, another 3,588 BTC (roughly $216 million) was sold.
With one press release, the untouchable reserve became a funding mechanism.
Call it what it is. Saylor pulled the economic rug out from under the original MSTR holders: not the crude kind that ends with an arrest, but the engineered kind, executed through 8-K filings. The shareholders still hold the same ticker, but it now represented the most junior claim in a materially different company.
He altered the deal.
The lawyers have noticed. On June 24, Rosen Law Firm announced a securities investigation on behalf of holders across all five tickers, alleging the company "may have issued materially misleading business information to the investing public."
An investigation is not a lawsuit. It is also not nothing.
What exactly does the MSTR shareholder own?
A share in a company that owns bitcoin is not bitcoin.
The MSTR holder cannot withdraw the coins, move them, spend them, or independently verify a claim to any specific bitcoin. He cannot exit the structure and take his portion of the reserve with him.
He can sell his paper claim to someone else. That is the complete list of his powers.
Strategy's own language is honest here. It sells "economic exposure" to bitcoin. Take the company at its word. Exposure is not ownership.
And after the dividends, the dilution and management's discretion each take their cut, the common shareholder may end up with less exposure than if he had simply bought bitcoin.
No keys. No coins. No redemption. No sovereignty.
The repo man
Saylor has been unusually candid about how he views self-custody advocates. In an October 2024 interview, he dismissed concerns about institutional seizure as the paranoia of "crypto anarchists" and suggested bitcoin was safer in the hands of institutions such as BlackRock, Fidelity, and JPMorgan:
"People say that but mostly it's mostly it's paranoid crypto anarchists that say that okay because it's a myth and a trope that goes on over and over again." โ Michael Saylor (2024 "Markets with Madison" interview)
He walked the remarks back within days. But he said them.
A single company holding hundreds of thousands of bitcoin with a small number of institutional custodians is an obvious honeypot for a 6102-style government action.
In 1933, the United States government restricted private gold ownership. It did not need to search every home in America. The gold was concentrated in vaults and financial institutions. This is not a myth, no matter how much Saylor tries to gaslight the public.
If the government ever attempts something similar with bitcoin, it will not begin by knocking on the doors of people running nodes and holding distributed multisig keys.
It will knock on Saylor's door.
Walk off the lot
Maybe MSTR rises again. Maybe traders make fortunes on the wrapper. None of it changes what the instrument is: a bet on bitcoin's price increasing, plus leverage, plus management, plus capital-market access, plus custodians, plus hoping the crowd continues to pay more for the box than for the thing inside it.
If that is the bet you want, make it with your eyes open. Just do not let a salesman tell you it is a safer way to own bitcoin.
It is not a way to own bitcoin at all.
Bitcoin removed the trusted intermediary. Saylor gave you a board of directors. Bitcoin removed the custodian. Saylor gave you institutional custody. Bitcoin removed the paper claim. Saylor gave you three kinds of paper. Bitcoin put the asset in your hands. Saylor gave you "economic exposure."
Bitcoin gave you the keys. Saylor gave you a tired horse.
Saylor is unquestionably a brilliant salesman. He marketed the financial system Bitcoin is replacing as an innovative way to own bitcoin... and persuaded investors to pay a premium for it.
You can walk off the lot. Buy the car. Learn to drive it. Hold your keys. Protect meaningful savings with multisig on separate offline devices in separate places. Verify with your own node.
The horse is not an upgrade.
Michael Saylor did not improve Bitcoin. He pushed an engineless car down a hill and called gravity financial engineering. And when the road went flat, he sold the engines to feed the horses.
Author's note: I am building COINCUBE to make distributed multisig and personal Bitcoin node operation easier. You can .