MSTR Net mNAV Below 1 Seen as a Potential Buying Opportunity

Huo Xing Cai Jing reports that on October 17, crypto KOL CM stated that the market may have already priced in the impact of MSCI’s removal of MicroStrategy, and when actual passive selling pressure emerges, MSTR’s stock price may not decline further significantly. MSTR closed down 9.56% yesterday. Current market valuations of MSTR vary depending on the metric used. The standard mNAV is the ratio of the company’s market capitalization to the value of its BTC holdings, while net mNAV accounts for preferred shares and debt, reflecting the stock price relative to net BTC value per share. Net mNAV falling below 1 is rare and typically signals growing concerns about the company’s financial health or its valuation premise. For example, in June this year, concerns over MicroStrategy’s tight cash reserves and falling BTC prices caused net mNAV to come under pressure. Currently, however, MicroStrategy has ample cash reserves—sufficient in theory to cover dividend payouts for approximately the next three years—and BTC’s price remains well above its ~$75,000 cost basis. Therefore, the likelihood of net mNAV dropping below 1 again is low. If it does fall below 1, it could instead present an investment opportunity.