"Strategy's market cap was $50.6 billion at the time of writing and its 650,000 Bitcoins were worth $56.7 billion. The key metric for Strategy, however is its "mNAV" (multiple to net asset value), which is a ratio describing the company's theoretical enterprise value (currently $65.2 billion) to its Bitcoin holdings. That ratio was 1.15 this morning, meaning its enterprise value is worth 15% more than its Bitcoin."
"However, if the mNAV falls below 1, then Strategy faces a crisis: the reason for holding the stock vanishes, and no one will be likely to provide the company with more capital-a period of fierce selling could ensue. The situation was made more tense after Strategy CEO Phong Le said on a podcast that the company would be willing to sell some of its Bitcoin in order to meet the dividend commitments on its debt and preferred shares."
Tech stocks tied to Bitcoin staged a modest overnight comeback but remained unable to erase prior losses as Bitcoin lost 21% over the past month. Bitcoin stabilized near $87,000 and traded up 0.72% today. Coinbase and Robinhood fell yesterday then posted small premarket gains. Michael Saylor's Strategy holds 650,000 Bitcoin and currently has a market cap ($50.6 billion) below the value of its Bitcoin ($56.7 billion). Strategy's mNAV equals 1.15, meaning enterprise value is 15% above its Bitcoin; an mNAV below 1 could trigger fierce selling. CEO Phong Le said the company might sell Bitcoin to meet dividend obligations if capital access is unavailable.
Read at Fortune
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