Bitcoin has another difficult day in the markets it was down almost 3% to $98,600, helping to drag down the largest corporate BTC holder, Strategy (MSTR), by 6.6%.
MSTR, now trading at $210, has returned to levels not seen since the weeks before Donald Trump’s election last November. The stock is down 30% year to date and 36% year over year, although it remains massively higher since Michael Saylor and his team adopted a bitcoin treasury strategy in August 2020.
The strategy’s decline relative to the price of bitcoin led some on social media to declare the stock in buy territory due to its market cap now being considerably below the value of its BTC stack, i.e. the 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 issues, which have a higher recovery preference than common stock.
Adding those elements brings the strategy business value to $75.4 billion, or nearly 20% more than the value of its bitcoin holdings; The numbers were made clear by Strategy’s own dashboard, which showed a mNAV of 1.19 at press time.
Strategic common shares may be cheap or perhaps expensive, but at current levels, they are not changing hands at a discount to the company’s bitcoin.
