Strategy mNAV Falls Below 1: Bitcoin Strategy Under Pressure

Strategy(https://www.strategy.com/), the company behind Michael Saylor’s well-known Bitcoin buying strategy, is approaching a critical threshold. The company’s mNAV drops below 1 for the first time, meaning that Strategy’s enterprise value is lower than the market value of its own Bitcoin holdings. This raises serious questions about the sustainability of the strategy with which the company has for years been issuing new shares to buy even more Bitcoin.

Bitcoin is available at OKX and Bybit.

mNAV drops to 0.99 at market close

At the closing price on 26 June, the Strategy website shows an mNAV of 0.99, a decline of nearly 2% from the previous day. The MSTR share closes at $82.31, a loss of 3.54% on that day. The company’s total Bitcoin reserve stands at $50.7 billion at that time, while the enterprise value comes to $50.4 billion. The Bitcoin price is $59.835 at the time of measurement, representing a total position of 847,363 BTC.

The preferred share STRC also shows a significant decline. This share closes at $74.57, a loss of 1.48%, and thus trades at a discount of approximately 25% relative to the liquidation value of $100. Strategy’s debt amounts to $6,754 billion, with a net leverage of 11%.

Why the 1.22x threshold is so important

Strategy’s management has previously indicated that an mNAV of at least approximately 1.22x is necessary to make issuing new MSTR shares to finance additional Bitcoin purchases worthwhile. As long as the mNAV remains above that threshold, every new Bitcoin purchase via share issuance directly adds value for existing shareholders.

Now that the mNAV has dropped below 1, that calculation has reversed. The management itself states that in such a situation, other options may be more attractive than continuing to buy Bitcoin via share issuance. Think of selling part of the Bitcoin position, building up cash reserves, or buying back its own shares. The implied volatility of MSTR, by the way, remains high at 94%, indicating that the market expects further large price movements.