TLDR
- Strategy’s enterprise value dropped to match its Bitcoin holdings, bringing its mNAV down to 1x.
- The company’s stock fell to $158.45, reducing its enterprise value below $63 billion.
- Strategy’s mNAV metric reached its lowest level since March 2023.
- The company replaced its basic mNAV calculation with a version based on enterprise value.
- Screenshots and archived versions confirmed that the mNAV has now reached parity at 1x.
Strategy’s valuation premium over its Bitcoin (BTC) holdings disappeared this week, as its enterprise value-to-BTC ratio dropped to 1x, its lowest level since March 2023, while its common stock (MSTR) declined sharply and investor appetite for its securities weakened further, based on data disclosed by the company.
Enterprise Value Now Equal to BTC Holdings
Strategy’s stock price dropped to $158.45 during Nasdaq’s morning session, pushing its enterprise value below $63 billion. At the same time, its BTC holdings were valued at roughly $62 billion, putting its enterprise value-to-BTC ratio at 1x. This metric, known as mNAV, dropped within one-hundredth of a point of parity.
Screenshots of Strategy’s homepage within the past 24 hours confirmed the 1x mNAV figure, replacing the previous 1.02x level. Archived pages from earlier this month on Archive.org also show the previous mNAV level before the recent drop. This was the first return to 1x since March 12, 2023.
The mNAV metric has become a key investor confidence gauge, reflecting the company’s premium valuation over direct BTC exposure. Originally, Strategy published a basic mNAV calculation based only on market cap and BTC, but it later changed this to include enterprise value. The company now lists only the enterprise value-based mNAV on its homepage.
Investor Confidence Drops as mNAV Falls
Strategy has marketed its securities as a financialized version of BTC ownership, often promoted by founder Michael Saylor. However, the current mNAV indicates that the market now values Strategy shares equally to spot BTC. This suggests declining investor confidence in the firm’s capital management.
“mNAV is the best indicator of market belief in our value-add on Bitcoin,” said a prior Strategy investor pitch deck. As the mNAV dropped to 1x, that belief appeared to weaken, as evidenced by the stock’s trading behavior. The equity now trades at a 33-month low in premium relative to its BTC per share.
Strategy’s enterprise value calculation includes preferred shares and corporate debt along with market cap, making it more complex. The fluctuation in those instruments has increased volatility in the company’s mNAV metric. Six corporate debt series and five listed securities contributed to the calculation.
Accretive Dilution No Longer Possible at 1x mNAV
Strategy’s key method of acquiring more BTC per share involved at-the-market (ATM) equity sales. These sales allowed BTC per share to rise, a process known as accretive dilution, only when mNAV stayed above 1x. Now, with mNAV at 1x, further dilution through ATMs would lower BTC per share.
Without accretive dilution, the company may need alternative strategies for capital raising. These include issuing new debt, launching preferred shares, or attempting to restore a higher mNAV. However, market pricing suggests these options may face challenges unless confidence improves.
Strategy had previously framed its ability to raise capital while growing BTC per share as a competitive edge. That strategy depended heavily on the premium embedded in the stock price above BTC value. The disappearance of that premium restricts financial flexibility.
Archived investor materials emphasized that accretive dilution worked only during high mNAV periods. Now that mNAV stands at parity, dilution would likely reduce BTC per share instead. Thus, the company’s key mechanism for growing holdings without earnings is paused.
No new capital raising mechanisms have been announced as of Tuesday morning. However, the mNAV displayed on the company’s website continued to hover at 1x. The equity traded on lower volume, reflecting the caution in current markets.
Strategy has not issued a formal statement on the drop in mNAV. Its homepage continues to list mNAV under “Company Metrics” without clarification. The number remains a critical benchmark for future activity.
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