The two largest publicly traded companies holding bitcoin, Strategy (MSTR) and MARA Holdings (MARA), have each fallen about 40% over the past six weeks.
The MSTR correction has been widely covered by CoinDesk Research, but MARA, which is down 55% year over year, is also attracting attention as some investors consider it cheap at current levels.
Matthew Sigel, head of digital asset research at VanEck, maintains that the data does not support the perception of MARA as cheap. Sigel maintains that the company is actually trading at a premium to its bitcoin holdings and not at a discount.
Sigel highlights MARA’s $3.3 billion in outstanding convertible debt relative to its $4.9 billion in bitcoin holdings. The adjustment for the convertible debt leaves just $1.6 billion of net bitcoin value before accounting for any additional liabilities the mining business incurs.
That compares to a market capitalization of $4.7 billion, which Sigel implies MARA is actually trading at a premium once debt is included, rather than at a discount to its bitcoin holdings.
Sigel also addresses MARA’s high short interest, which currently stands at 27%. After adjusting for delta hedging related to the company’s convertible notes, Sigel estimates that the true short interest falls to about 15%, a reduction from 44%.
Sigel contrasts this with MSTR, which has more than $8 billion of convertible debt, compared to a market capitalization of $53 billion.
Once the hedge-related short positions are eliminated, MSTR’s short interest decreases by only 31%, or approximately 9 million shares. Sigel characterizes MARA’s short-term interest as more structural, compared to MSTR’s, which he sees as more fundamentally driven.
Sigel maintains that more than half of MARA stock’s volatility is due to its capital structure and funding dynamics rather than pure bitcoin beta. He concludes that MSTR offers much cleaner bitcoin duration exposure, while MARA’s mining capital performance is dominated by what he describes as a problematic capital structure.
