Another difficult day in the markets has bitcoin lower by almost 3% to $98,600, helping to drag the largest corporate holder of BTC, Strategy (MSTR), down by 6.6%.
Now trading at $210, MSTR has returned to levels not seen since the weeks leading up to the election of Donald Trump last November. Shares are down 30% year-to-date and 36% year-to-date, but remain massively higher since Michael Saylor and team adopted a bitcoin strategy in August 2020.
The move in the strategy relative to the price of bitcoin prompted some on social media to declare the stock in buy territory due to its market cap now being significantly below the value of its BTC stack, i.e. a so-called mNAV below 1.
In fact, Strategy’s 641,692 bitcoins are worth $63.2 billion, or about 5% more than the current market cap of $60 billion. However, this calculation leaves out all of the company’s preferred and debt issuances—both of which have higher repayment preferences than the common stock.
Adding these elements brings strategies enterprise value to $75.4 billion, or nearly 20% more than the value of its bitcoin holdings — figures made clear on Strategy’s own dashboard, which showed an mNAV of 1.19 at press time.
Strategic common stock may turn out to be cheap or perhaps expensive, but it is not—at current levels—changing hands at a discount to the company’s bitcoin.
