Michael Saylor’s Strategy Nears “Danger Zone” as mNAV Threatens to Slip Below 1

Core Viewpoint - Strategy's market-to-net-asset-value (mNAV) is approaching a critical threshold, indicating potential challenges in maintaining its stock as a proxy for Bitcoin exposure [1][2] Group 1: Market Valuation and Performance - Strategy's mNAV is currently near 1.02, with little margin before it could fall below 1.0, which would imply the market values the company less than its Bitcoin holdings [2] - The stock has decreased approximately 66% from its peak in July, despite a modest rise in early January [1] Group 2: Bitcoin Holdings and Financial Position - Strategy holds 672,497 Bitcoin, the largest corporate stash globally, with an average acquisition cost of about $75,000 per coin, currently valued at around $60.7 billion with Bitcoin trading near $90,000 [4] - The company's market capitalization is approximately $45 billion, with a diluted valuation around $50 billion, indicating a discount to its underlying assets [5] Group 3: Funding and Capital Raising - The proximity of mNAV to 1.0 raises concerns about the company's ability to raise capital through equity sales, which could become more difficult if the stock trades below the value of its reserves [5][6] - Recently, Strategy raised $747.8 million through stock sales, which helps cover about 21 months of dividend and interest obligations, reducing the need to liquidate Bitcoin during market stress [6] Group 4: Management Strategy - Executives have indicated that selling Bitcoin would be a last resort, only to be considered if other financing options are unavailable and the firm's valuation falls below its asset base [7]