Michael Saylor’s MSTR Is Down, but Maybe Not as Cheap as Thought

Another difficult day in the markets has bitcoin BTC$98,667.80 down almost 3% to $98,600, helping to drag down the largest corporate holder of BTC, Strategy (MSTR), by 6.6%.

Now trading at $210, MSTR has returned to levels not seen since the weeks before the election of Donald Trump last November. Shares are down 30% year-to-date and 36% year-to-date, but remain much higher since Michael Saylor and team adopted a bitcoin treasure strategy in August 2020.

The dive in Strategy relative to the price of bitcoin has prompted some on social media to declare the stock in the territory of buying due to its market capitalization which is now sizably below the value of its BTC pile, that is to say a mNAV called under 1.

Indeed, Strategy’s 641,692 bitcoins are worth $63.2 billion, or about 5% more than the current market cap of $60 billion. This calculation, however, leaves out all of the company’s preferred and debt issues – both of which have a higher repayment preference than common stock.

Adding those elements brings Strategy’s enterprise value to $75.4 billion, or almost 20% more than the value of their bitcoin positions – the numbers are clearly Own strategy dashboardwhich showed a mNAV of 1.19 at press time.

The common action of the strategy may be reduced or perhaps expensive, but it is not – at current levels – changing hands at a discount to the company’s bitcoin.