Strategy mNAV falls below 1, market valuation is now lower than its bitcoin holdings value

June 27th, Strategy (MSTR)'s mNAV has fallen below 1, indicating that the market currently values the company below the value of its held Bitcoin. This is unusual for Michael Saylor’s led Strategy. For years, investors have assigned Strategy a valuation higher than its Bitcoin holdings, allowing flexibility in financing when needed, which Saylor and his team have fully utilized. Currently, Strategy’s stock price has dropped to about $82, down roughly 85% from the historic high in November 2024, and the enterprise value has declined to about $50.4 billion. Meanwhile, with the Bitcoin price around $60,000, the value of Strategy’s Bitcoin holdings is about $51.1 billion. This means the market has valued the entire company lower than the Bitcoin it owns. At this level, issuing new shares would be dilutive for Strategy, as the company would essentially be selling equity at below the value of its underlying assets. While this does not mean Strategy cannot continue issuing new shares, raising funds at the current valuation may draw further criticism. Previously, the recent Bitcoin purchases by Strategy have already caused dilution for common shareholders and sparked opposition within the community. The market is concerned that Strategy is becoming increasingly similar to a closed-end fund rather than an operating company. Similar tools typically trade at premiums to their Bitcoin holdings when demand is strong, but can experience long-term discounts after investor sentiment weakens. However, unlike traditional closed-end trusts, Strategy still has multiple tools available, including issuing debt or equity when it has an accretive effect, redeeming or refinancing securities, generating operational cash flow from its software business, and actively managing its capital structure.