Ex-Goldman Credit Veteran Says STRC Mispriced by 13%

Khing Oei, a former credit veteran at Goldman Sachs (GS), argues that the market is mispricing Strategy's STRC by approximately 13%, estimating its fair value at $96 compared to the current $85. Oei points out that the stated 14% yield relies on flawed methodology.

Recommendation Change

Oei has not issued an official buy or sell recommendation, but his analysis suggests the market undervalues STRC by about 13% relative to his $96 valuation.

Analyst's Rationale

Oei believes the current 14% yield uses an inaccurate formula that does not reflect the instrument's true risks. He says a proper valuation should account for the bond's unique structure and terms, resulting in a higher value.

Context

The remarks come amid growing investor interest in STRC for its high yield. However, no other analysts have issued similar assessments yet. GS stock itself trades near its all-time highs.

Conclusion

Oei's analysis offers a contrarian view but does not constitute an investment recommendation. Investors are encouraged to conduct their own research before making decisions.