VanEck's Sigel: MARA Trades at a Premium to Net Bitcoin Holdings After Debt
Matthew Sigel of VanEck argues that Marathon Digital Holdings (MARA) is trading at a premium relative to its net bitcoin value once its debt is considered.
MARA holds $4.9 billion in bitcoin but carries $3.3 billion in convertible debt, resulting in a net bitcoin value of about $1.6 billion after debt adjustments.
Despite this, MARA's equity market capitalization stands at $4.7 billion, implying the stock trades above its net bitcoin value after factoring in debt.
Short interest in MARA is reported at 27%, but when adjusting for delta hedging on its convertible notes, the true short interest decreases by approximately 44% to around 15%.
In comparison, MicroStrategy Incorporated (MSTR) has over $8 billion in convertible debt and a $53 billion market cap; MARA's financing structure is considered more structural in nature.
MSTR's short interest similarly declines by about 31% after removing hedge-related shorts, amounting to roughly 9 million shares.
Both MARA and MSTR have experienced declines of approximately 40% over the past six weeks, with MARA down 55% year over year.
Sigel attributes MARA's volatility primarily to its capital structure rather than direct bitcoin exposure, noting that MARA offers a less clean bitcoin duration exposure compared to MSTR.
While some investors perceive MARA as inexpensive at current levels, Sigel disputes this view, emphasizing the premium valuation when factoring in debt.
