Strategy does not recover value above its bitcoin holdings

Shares of Strategy (MSTR), the listed company with the largest corporate holdings of bitcoin (BTC), are trading below the market value of its holdings in the digital currency.

In the premarket session today, November 17, the price is around $201, representing a 56% drop from the yearly high of $457 reached in July.

This decline has taken the base net asset value multiple (core mNAV) to 0.93. This indicator compares the current market capitalization—calculated solely with shares outstanding today and without considering future dilutions from convertible bonds—with the market value of all the bitcoin held by the company.

A value less than 1.00 implies that the market is valuing the entire company (software business, brand, management team and debt included) for less than what its reserves of the digital currency alone are worth.

There are positive indicators for Strategy

Broader multiples remain in positive territory. Diluted mNAV stands at 1.041 when incorporating the potential creation of new shares if the bonds are convertedwhile the mNAV of enterprise value (EV) reaches 1.175 when adding net debt to the numerator, recognizing that much of that debt was used precisely to acquire bitcoin.

However, it is the discount to the basic mNAV that focuses the market’s attention, because it eliminates any dilutive or accounting effects and shows a direct punishment on digital currency holdings.

This puts in check the bitcoin-based corporate treasury strategy that Strategy leads and popularized. As NoticiasVE reported, dozens of smaller companies with less access to capital replicated the model by converting cash into bitcoin. If not even the largest and most resilient company in the sector manages to maintain a premium on its reserves, the others could face forced sales or a general crisis of confidence in the narrative of corporate adoption of the digital currency.