Strategy’s Bitcoin Treasury Model: Corporate Omphaloskepsis, Polypharmacy of Risk, and Shareholder and Societal Welfare

Strategy Inc (MSTR), formerly MicroStrategy Incorporated, styles itself as the first and largest “bitcoin treasury company” (BTCo). MSTR essentially produces no goods or services and generates no operating cash flow. Yet by early 2025, its share price had risen 27-fold in under five years, a 110% annualized return—exceeding that of every S&P 500 stock. Corporations worldwide began imitating its BTCo model. With 4% of all outstanding bitcoins, MSTR is the largest known institutional holder. In 2025 it issued more equity capital than any other U.S. company.

This Article is the first academic work on the law and economics of the MSTR model. It introduces two concepts: “corporate omphaloskepsis,” which captures the model’s ends and means, and “polypharmacy of financial risk,” which frames some key consequences for shareholders. Together, they help characterize a fundamentally different kind of public company. MSTR’s path to shareholder wealth maximization departs from longstanding financial and legal understandings. Where the animating engine of ordinary public companies rests on producing goods and services, MSTR’s rests largely on repeatedly issuing shares at a premium over the per share net asset value (NAV) of its bitcoin holdings, with proceeds immediately deployed to buy more. Management focuses on these issuances and purchases, on sustaining and, ideally, expanding the share price premium, and on promoting bitcoin.

The Article calls this “corporate omphaloskepsis”: the firm gazes inward at two numbers—bitcoin’s price and its share price’s premium over NAV—with the outside world mattering only insofar as it moves them. So long as the premium holds, each issuance is arithmetically accretive to NAV—an internal arbitrage in which new shareholders subsidize existing ones. MSTR’s bitcoin advocacy works on two margins: it lifts its core asset’s price and, by burnishing the case for the amplified bitcoin exposure MSTR shares offer, helps sustain the premium. Unlike ETFs, whose authorized participant mechanism tethers share prices to NAV, MSTR shares usually traded at a substantial premium—a deviation central to its animating engine.

A sharp break in crypto assets in late 2025 sent MSTR shares plunging from their all-time high, while the premium contracted markedly. Bitcoin, MSTR’s share price, and the premium have recovered from their 2026 lows but remain far below prior peaks.

Beyond offering an analytical framework for dissecting a new kind of public company, the Article’s contributions are threefold. First, it shows that MSTR’s core ends and means are unique. Its ends are an extreme “financialization” of the shareholder wealth maximization contemplated by corporate law and corporate finance theory. Its essential means depart from ordinary public company logic: the animating engine runs on share price premiums and bitcoin purchases. Sustaining the premium also requires other sui generis managerial tasks: e.g., amplifying bitcoin exposure, promoting bitcoin, and catering to investor heterogeneity with unusual intensity. The Article also explores puzzles in identifying the share price at which the engine functions, including a “Fulcrum Ratio” concept and competing methods for calculating “mNAV” (multiple of share price to per share net asset value).

Second, the Article identifies novel shareholder protection and societal welfare concerns. Shareholders confront a “polypharmacy of financial risk” more complex and harder to assess than its medical namesake. A range of hazards—bitcoin’s volatility, MSTR’s status as a bitcoin whale, the amplified exposure embedded in its capital structure, and substantive, process, and regulatory risks associated with MSTR’s animating engine—are reflexively coupled. Each hazard reshapes the others, so their interaction is endogenous and shifting rather than fixed. The composite risk exposure is profoundly idiosyncratic and may be closer to Knightian uncertainty than calculable risk. MSTR’s unusually heavy retail ownership and the missives seemingly encouraging ill-diversification exacerbate the concerns. The societal concerns center on economic growth. MSTR’s advocacy that public companies redirect securities issuance proceeds from product development to bitcoin accumulation cuts against the innovation on which long-run economic dynamism depends.

Third, the Article proposes responses. Its proposals are not predicated on MSTR or bitcoin being Ponzi-like, meme stock-like, or otherwise suspect. Instead, these proposals are grounded in a principle of neutrality between the MSTR model and the ordinary public company model. Existing private ordering and federal disclosure rules have inadvertently favored the former, boosting demand for MSTR shares. On the private ordering side, the MSCI Global Investable Market and Nasdaq-100 indexes—primarily meant to capture only operating companies—nonetheless include MSTR due largely to outmoded eligibility criteria and MSTR’s legacy, relatively insignificant, software business. The inclusion forces purchases by every investor tracking these benchmarks. On the regulatory side, the Securities and Exchange Commission (SEC) “Management’s Discussion and Analysis” (MD&A) requirements call for public companies to offer thoughtful management assessments of their prospects, including the risks and uncertainties associated with key business drivers. As drafted, it is unclear whether the MD&A reaches the mNAV driver of BTCos like MSTR. As for the indexes, moving toward neutrality warrants serious consideration. As for the SEC, it should determine the circumstances in which the MD&A applies to the mNAV.

An Afterword briefly outlines some of the changes to MSTR’s functioning announced on May 5, 2026.