Shares of Strategy (MSTR), the publicly traded company with the largest holding of Bitcoin (BTC), is trading below the market value of its holdings in the digital currency.
Today, in the pre-market session on November 17th, the price is around $201. That’s a 56% drop from the annual high of $457 hit in July..
This decline resulted in a core net asset value multiple (core mNAV) of 0.93. This metric compares the current market capitalization (calculated using only the current outstanding shares, without considering future dilution from convertible debt) to the market value of all Bitcoins held by a company.
A value below 1.00 means that the market values the entire company (including its software business, brand, management team, and debt) less than the value of its digital currency reserves alone.
Strategy has positive indicators
The broader multiple remains in positive territory. Taking into account the possibility of new shares being issued if the bonds are converted, the diluted mNAV is 1.041.when adding net debt to the numerator, the enterprise value (EV) mNAV reaches 1.175, but it is recognized that much of that debt was used to acquire just that Bitcoin.
However, it is the discount to the basic mNAV that captures the market’s attention. This is to eliminate any dilution or accounting implications and to represent direct penalties for holding digital currencies.
this Curb Bitcoin-based corporate finance strategy led by Strategy And it became popular. As reported by CriptoNoticias, dozens of small and medium-sized businesses with less access to capital have replicated this model by converting their cash to Bitcoin.
If even the largest and most resilient companies in the space fail to maintain reserve premiums, others could face forced sales and a general crisis of confidence in the digital currency corporate adoption narrative.
