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For years, Strategy traded at a premium to the Bitcoin on its balance sheet. Investors were happy to pay extra for the convenience of getting BTC exposure through a stock ticker. That premium just evaporated.
Strategy’s enterprise market Net Asset Value ratio, known as mNAV, dropped below 1.0 on June 27, hitting 0.99. In English: the company’s enterprise value briefly fell below the actual value of its Bitcoin holdings.
The numbers tell a painful story
Strategy holds approximately 847,363 BTC, worth roughly $50.2B at recent prices in the $59K to $60K range. The company’s market capitalization, meanwhile, has contracted to somewhere between $29B and $32B.
The stock is trading around $82, which represents an approximately 85% decline from its November 2024 peak.
The mNAV ratio did recover slightly to around 1.03 by June 29, so the dip below 1.0 was brief.
Management responds with a new playbook
CEO Phong Le acknowledged that if the ratio persists below 1.0, the company may consider selling Bitcoin as a last resort.
On June 29, Strategy announced a new capital framework. The plan allows for up to $2B in share buybacks. The company also introduced what it calls a “Bitcoin monetization program” designed to improve liquidity without resorting to outright sales of its BTC holdings.
Michael Saylor, who remains Executive Chairman, appears to be staying the course on accumulation. Strategy has continued buying Bitcoin even during this downturn, though it did sell 32 BTC recently for tax optimization purposes.
What this means for investors
The $2B buyback authorization is interesting precisely because it reveals how management is thinking about the problem. If you can buy back shares at a price that implies a discount to the underlying Bitcoin, you’re essentially acquiring BTC at below market price using the company’s own stock as currency.
The risk that deserves the most attention is a scenario where Bitcoin prices fall further while Strategy’s debt obligations remain fixed. The company has funded much of its Bitcoin acquisition through convertible notes and equity issuances. If BTC drops significantly below $59K and the mNAV sinks deeper below 1.0, the pressure to liquidate holdings could become structural rather than optional, regardless of what Saylor or Le prefer.
Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.
English (US) · 