"and this morning its "mNAV"-a technical gauge of whether the company is worth more or less than the Bitcoin it holds-was at 1.02. If that gauge falls below 1, then technically the company is worth less than the Bitcoin it owns. At that point, the stock would be sold off by many investors because there is no point in owning a stock whose value is based on Bitcoin if the stock is worth less than the Bitcoin."
"Its market cap was $47 billion today; the Bitcoin held by the company is worth just under $60 billion. That on its own is a perilous position. But if the company's mNAV ("market-to-net asset value") falls below 1 then the stock potentially enters a new world of pain. mNAV is a measure of the company's total market cap plus its debt, minus its cash, divided by its total Bitcoin reserve."
Strategy's stock briefly rose 1.22% in early trading but has declined 66% since its July high. The company's mNAV stood at 1.02, just above the critical 1 threshold that would indicate the company is worth less than its Bitcoin holdings and could prompt sell-offs. The firm's market capitalization was about $47 billion while its Bitcoin reserve was worth just under $60 billion. mNAV equals market cap plus debt minus cash divided by total Bitcoin reserve. Michael Saylor has tweeted bullishly and highlighted open interest equal to about 87% of market value. The company historically accumulated Bitcoin at about $74,000 per coin; Bitcoin trades near $89.6K.
Read at Fortune
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