Then this morning, Strategy Chairman Michael Saylor went on to brag about how his company’s sales ahead of that S&P 500 declination allowed the company to buy more bitcoin ($BTC).
With that $200 million from MSTR dilution plus $16.8 million from preferred shares, the company acquired 1,955 additional $BTC last week.
Selling MSTR to achieve $BTC yield
As usual, Saylor boasted about the company’s so-called $BTC Yield, the gain in Strategy’s $BTC holdings relative to its assumed diluted shares outstanding.
Even though investors bidding more for MSTR than its $BTC holdings fund the overwhelming majority of this “yield,” Saylor usually excludes that explanation when boasting about impressive-sounding $BTC yield figures like today’s 25.8% year to date achievement.
The company even has a $BTC yield target of 30% for the year. Of course, it overwhelmingly achieves these targets by selling down investors’ bullish multiple-to-net asset value (mNAV) on MSTR shares.
Although the company has sold some debt and preferred shares in a non-dilutive manner, direct MSTR dilution via ATM offerings has funded the vast majority of its capital raises.
Read more: Michael Saylor diluted MSTR by $735.2 million after saying he wouldn’t
As recently as November 2024, investors bid over 3.4x for MSTR shares versus Strategy’s $BTC holdings. Today, that same basic mNAV has declined to 1.31x.
As that multiplier declined over the months, Strategy popularized a variant of basic mNAV to boost the multiplier into a larger number.
It now prefers enterprise value mNAV, which includes not only MSTR but also the company’s bonds and preferred stocks, to reach 1.53x.
protos.com
