Michael Saylor's Company Strategy Approaches a Critical Threshold as mNAV Risks Falling Below 1

Michael Saylor's Bitcoin-centric company, Strategy, is nearing a crucial valuation level. Its market-to-net-asset-value (mNAV) multiple is just above a critical point, which could affect its standing as a valuable proxy for Bitcoin exposure.

Key Takeaways

Strategy's market-to-net-asset-value (mNAV) is close to 1.02, indicating potential pressure on its stock value.
Falling below 1.0 could make holding the stock less appealing compared to buying Bitcoin directly.
The company holds 672,497 Bitcoins, valued at approximately $60.7 billion, but is trading at a market cap around $45 billion.
Recent stock performance has seen a decline of about 66% since July, highlighting investor uncertainty.
Management is exploring strategies to minimize funding risks but faces challenges if Bitcoin prices drop further.

Michael Saylor's Company Strategy Approaches a Critical Threshold as mNAV Risks Falling Below 1

Current Situation of Strategy's Valuation

Michael Saylor's company Strategy is once again nearing a pivotal valuation threshold, as its market-to-net-asset-value (mNAV) ratio hovers just above levels that could challenge the rationale for holding its stock as a means of gaining Bitcoin exposure.

In the early trading hours on January 2, shares of Strategy saw a modest rise, providing a brief respite following months of downward pressure.

Despite this minor uptick, the stock remains down approximately 66% from its peak in July.

Presently, the company’s mNAV—which compares its market value to the value of its Bitcoin reserves—stands at around 1.02, allowing little room for maneuver before slipping below the 1.0 mark.

If this occurs, it would indicate that the market views Strategy as worth less than the actual Bitcoin it possesses.

Concerns Over Strategy's Bitcoin Valuation

The significance of this situation cannot be overstated, as the appeal of holding Strategy’s equity hinges on its ability to trade at a premium to its Bitcoin reserves.

When the mNAV dips below 1.0, it becomes theoretically cheaper for investors to acquire Bitcoin directly rather than through holding the stock.

Historically, such scenarios have resulted in selling pressure, as the justification for accepting corporate risks, dilution, and management costs diminishes.

The financial statements of the company illuminate this tension: Strategy holds 672,497 Bitcoins—the largest corporate holding globally—acquired since August 2020 at an average cost of roughly $75,000 each.

With Bitcoin trading at around $90,000, these holdings are valued at approximately $60.7 billion, reflecting an unrealized gain of about 20%.

Nonetheless, Strategy’s baseline market capitalization is closer to $45 billion, with a diluted valuation around $50 billion, indicating a discount relative to its underlying assets.

In terms of enterprise value—factoring in debt and cash—Strategy’s mNAV is estimated to be just under 1.0. This proximity has intensified scrutiny of the company's financial strategies, particularly as it relies on issuing new equity at a premium to finance further Bitcoin acquisitions.

Should the stock continues to trade below the value of its reserves, raising capital through share sales would become more challenging and potentially dilutive.

To address short-term funding risks, the management has taken decisive steps; in recent weeks, they secured $747.8 million through stock sales under its ATM program.

The company claims these reserves can cover approximately 21 months of dividends and interest obligations, alleviating the urgency to liquidate Bitcoin during market downturns.

Management has indicated that selling Bitcoin would only be a last resort, to be considered only if other financing avenues are exhausted and if the firm’s valuation drops beneath its asset base.

Challenges Ahead: The Bitcoin Price Dilemma

However, another critical threshold lies just beneath the mNAV line. If Bitcoin were to fall below the company’s average acquisition price of around $74,000, the value of its holdings would fall below the initial cost, potentially shaking investor confidence.

While some shareholders may view such situations as long-term buying opportunities, they can also heighten volatility for those traders less committed to holding the stock.

The recent performance of Strategy reflects this uncertainty; the company’s shares have plummeted more than 60% in the past six months, finishing 2025 down nearly 50%, making it the poorest performer in the Nasdaq-100 last year.

This decline followed a notable rally earlier in 2025, when the stock surged in tandem with Bitcoin, only to reverse course as market sentiment shifted in the latter half.

While Bitcoin maintains a higher valuation—trading about 28% below its all-time peak—but has seen a strong increase in recent trading sessions, the disparity between Bitcoin's stabilization and Strategy's declining stock price has ignited discussions on whether the company is becoming more of an investment vehicle than an operational business.

Critics, including economist Peter Schiff, argue that the stock's downturn reflects the burdens of aggressive Bitcoin accumulation on shareholder value.