The two largest publicly traded companies holding Bitcoin, Strategy (MSTR) and MARA Holdings (MARA), have each fallen about 40% over the past six weeks.
CoinDesk Research has covered the MSTR correction extensively, but MARA, which is down 55% year-over-year, is also in the spotlight as some investors view it as undervalued at current levels.
Matthew Sigel, head of digital asset research at VanEck, argues that the perception that MARA is cheap is not supported by data. Siegel argues that the company is not actually discounting its Bitcoin holdings, but trading at a premium.
Siegel highlighted that MARA has $3.3 billion in convertible debt, compared to its $4.9 billion Bitcoin holdings. Adjusting for the convertible debt, the net Bitcoin value is just $1.6 billion before taking into account the additional debt incurred by the mining operations.
By comparison, the stock has a market capitalization of $4.7 billion, and Siegel suggests MARA is actually trading at a premium, including debt, rather than at a discount to its Bitcoin holdings.
Siegel also cited MARA’s high short interest, which currently stands at 27%. Siegel estimates that after adjusting for the delta hedge associated with the company’s convertible notes, the true short interest drops to about 15%, a 44% decrease.
Siegel contrasts this with MSTR, which has more than $8 billion in convertible debt against a $53 billion market cap.
Once hedge-related short interest is removed, MSTR’s short interest would decrease by only 31%, or approximately 9 million shares. Siegel characterizes MARA’s short-term rates as more structural compared to MSTR, which he considers to be more fundamental-driven.
Siegel argues that more than half of MARA’s stock volatility is due to its capital structure and funding dynamics, rather than pure Bitcoin beta. He concludes that while MSTR offers cleaner Bitcoin duration exposure, the performance of MARA mining stocks is dominated by what he describes as a problematic capital structure.
